ACCONTING AN INTRODUCTION

ACCOUNTING
The AMERICAN institute of Certified Public Accountants(AICPA) defines accounting as"the art of recording,classifying and summarizing in a significant manner and in terms of money, transactions and events which are of a financial character and interpreting the result thereof."
FEATURES OF ACCOUNTING
1) RECORDING
Te process of recording transactions is the primary step of accounting. it start with identification of transactions amenable to measurement in terms of money.thereafter these transactions should be measured and expressed in terms of money. Finally such items are recorded in a book called "journal"
2) CLASSIFICATION
Usually transactions are recorded in the journal in chronological order. Thereafter, they are classified on the basis of similarity in their nature.It takes place in the book called "ledger". In ledger all transactions of similar nature are put together in one page known as "account".
3)SUMMARISATION
Summarisation is the presentation of the classified data in an understandable way to the internal and external users.It involves the preparation of the overall results of operation and financial position of the business.
4)ANALYSIS AND INTERPRETATION
Analysis is the process of identifying and establishing meaningful relationship among figures in the final account.But interpretation is the process of drawing conclusion on the basis of analysis.Hence the analysis and interpretation of data facilitate the end users to make a meaningful judgement about the financial position of the business.
4)COMMUNICATION
After completing the process of analysis and interpretation, the accounting information should be communicated in a proper form to the proper person. This is in addition to the communication of the usual profit and loss account and balance sheet.