As per this definition, accounting is just an art of record keeping. The process of accounting starts by very first identifying the occasions and deals which are of financial character and then be tape-recorded in the books of account. In ledger transactions and events are classified in terms of earnings, expense, possessions and liabilities according to their qualities and summed up in revenue & loss account and balance sheet.
According to American Accounting Association (Commonly Accepted Definition)
” The procedure of recognizing, measuring and communicating financial info to allow educated judgements and choices by the users of accounts.”
In 1970, the Accounting Concepts Board (APB) of American Institute of Licensed Public Accountants (AICPA) enumerated the functions of accounting as follows:
” The function of accounting is to provide quantitative info, mostly of financial nature, about financial entities, that is needed to be beneficial in making financial decisions.”
Thus, accounting may be defined as the procedure of recording, categorizing, summarising, analysing and translating the monetary transactions and interacting the outcomes thereof to the persons interested in such info.