What is Accounting?
Accounting consists of three basic activates - it identifies, records & communicates the economic events of an organization to interested users.
Brief definition of three activities of accounting:
1. Identifies : A starting point to the accounting process , a company identifies the economic events relevant to its business.
Example : Economic events are the sale of a companies products.
2.Records : Recording consists of keeping a systematic, chronological diary of events. It is measured by this countries own money. It provide a companies history of its financial activities.
Example : A company usually gather or collect accounting information from another way and then record their own book or financial statement.
3.Communicate : Communicate means sharing the recording information or accounting reports to the interested users.
Example : Buyers , Sellers , Investors , Creditors.