What is Accounting?

What is Accounting?

The size of modern business has grown to such an extent that hundreds, thousands and billions of business transactions take place in it. It is impossible to conduct a business undertaking by remembering the details of these transactions. Therefore, systematic records of these transactions are kept, their systematic knowledge and use-art is called accountancy. The practical form of accounting can be called accounting.  According to the Bulletin, Accounting Glossary of the American Institute of Certified Public Accountants (AICPA), "accounting refers to effectively writing, classifying, and summarizing in monetary terms those transactions and events that are at least partly financial in nature." and the art of interpreting their results.

According to this definition accounting is an art, not a science. This art is used to record, classify, summarize and interpret measurable transactions and events in currency of a financial nature.

The art of accounting, summarizing, reporting and analyzing the financial transactions of a business is called accounting. The person holding the charge of accounting is known as an accountant and the role of an accountant is similar to that of a record-keeper. However, accounting is now considered as a management tool that gives important information about the future of the organization.

Smith and Ashburn have presented the above definition with some corrections. According to him 'Accounting is primarily the science of recording and classifying business transactions and events of a financial nature and the art of making a significant summary, analysis and interpretation of those transactions and events and communicating the results to the persons who are to make decisions. According to this definition, accounting is both a science and an art. But it is not a completely definite science but almost a complete science.