Accounting | Accounting Definition | Objectives of Accounting

Accounting

According to American Accounting Association “It is the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.”

According to Smith and Ashburne Accounting is defined as “The Science of recording and classifying business transaction and events, primarily of financial character and the art of making significant summaries, analysis and interpretation of those transactions and events and communicating the results to the person who must take decision or firm judgment.”

Meaning of Accounting

Thus accounting is the process where we record and classify business transaction in such a way that it communicates the financial condition of the organization or firm which will help the user to make an informed judgment.

Objectives of Accounting

§  Identifying and recording of all transaction.

§  To assess the profit and loss of the business

§  To understand the financial condition of the business

§  To assess the financial performance.

§  To assess the taxes to be paid

Types of Accounting

1. Financial Accounting

2. Cost Accounting

3. Management Accounting  

4. Government Accounting

5.Tax Accounting

6. Inflation Accounting

7. Internal Auditing

8. Human Recourse Accounting