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ABM - Nature, Functions and History of Accounting

1. Accounting is a process that involves identifying, recording, and communicating economic events with the goal of providing financial information to internal and external parties. It is both a process and an art that requires skills and expertise. 2. Accounting only deals with quantifiable financial transactions and information. It is a means to achieve objectives like protecting business assets, meeting legal requirements, and communicating financial results. 3. Accounting functions include maintaining systematic financial records, calculating depreciation to protect assets, and communicating results to interested parties like investors and government agencies. It aims to meet legal reporting needs such as filing tax returns.

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824 views12 pages

ABM - Nature, Functions and History of Accounting

1. Accounting is a process that involves identifying, recording, and communicating economic events with the goal of providing financial information to internal and external parties. It is both a process and an art that requires skills and expertise. 2. Accounting only deals with quantifiable financial transactions and information. It is a means to achieve objectives like protecting business assets, meeting legal requirements, and communicating financial results. 3. Accounting functions include maintaining systematic financial records, calculating depreciation to protect assets, and communicating results to interested parties like investors and government agencies. It aims to meet legal reporting needs such as filing tax returns.

Uploaded by

airam cabaddu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Accountancy ,Business and

Management

MARICRIS T. DOMINGO
NATURES OF
ACCOUNTING
1.ACCOUNTING IS
A PROCESS

A process composed of multiple


steps that lead to a common end goal.
Accounting is a process it because it performs
the function of identifying, recording,and
communicating economic events with the end
goal of providing information to internal and
external parties.
Accounting is an Art.

Art refers to a way of performing


something. It entails creativity and skills to help
us attain some objectives.Accounting is a
combination of techniques and its application
requires applied skill and expertise.This the
reason why accounting can be considered as an
art.
3. Accounting deals with financial
information and transactions

Accounting deals only with


quantifiable financial transactions.These are the
only events identified by the
accountant,recorded in the book and
communicated to diferrent parties.
4. Accounting is a means and not an
end.

Accounting is a tool to achieve


specific objectives
5. Accounting is an infor mation
system

Recognized and characterized as


a storehouse of information.
FUNCTIONS OF
ACCOUNTING
1.Record Keeping

Accounting is to maintain systematic


and chronological record of financial
transactions and to post them subsequently to
the various Ledger Accounts and finally to
prepare the Final Accounts to find out the profit
or loss of the business at the end of the
Accounting Period.
2.Protecting of Properties

Accounting is to calculate the correct amount of


Depreciation on Assets by choosing the appropriate
Method applicable to any particular assets. any
unauthorized dissipation of any asset will bring the
business to the threshold of insolvency. Accounting
is to design a desirable system to protect the
properties and assets of the business from
unauthorized and unwarranted use.
3. Communication of
Results

Accounting is always to communicate the results of


the recorded and transactions to the different
parties who are interested in the particular
business, i.e., properties, investors, creditors,
employees, Govt.official and researchers etc.
4.Meeting Legal
Requirements

Accounting is to devise and develop such a


system of keeping record and reporting the results
as will always meet and legal requirements to
enable the proprietor or the authority to file various
statements like Income-Tax Returns, Sales-Tax
Returns etc..

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