Accounting and accountancy refer to the compilation of accounts in such a manner as to enable all concerned to assess the state of affairs of the business. Accounting is the work of recording the transactions and Accountancy is the profession of such persons.
Different fields of application are sampled by the following : cost accounting, management accounting, governmental accounting, and financial accounting. Yet, all these constitute an integrated field and are susceptible to be, and must be, evolved as a cohesive, comprehensive and compatible system. This is realized through the activities elaborated further on.
By analyzing, interpreting and reviewing the accounts, no matter what the field of application is, all concerned are enabled to draw conclusions with a view to guide management in delineating the future policy, orientation and pursuits of the business. It needs no gainsaying that each of these aspects - (a) draw conclusions, and (b) guide delineate future nonrepresentational - is important. Such importance can be gleaned from definitions and statements of purpose proposed severally as in the following; let it be incidentally noted that some offense definitions specifically refer to "property" in their text; note also the emphasis on "monetary terms".
American Accounting Association
Accounting is the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.
Lawrence, Metchman and Albert Slevin
Accounting is the process of recording the changes, in terms of increases and decreases, in property or in the rights to property and the analysis and interpretation of financial transactions.
Anthony, R. N.
An accounting system is a means of collecting, summarizing, analyzing and reporting - in monetary terms - information about the business.
American Institute of Certified Public Accountants
Accounting is the art of recording, classifying and summarizing in a significant manner, and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.
Smith and Ashburne
Accounting is a science of recording and classifying the business transactions and events, primarily of a financial character, and the art of making significant summaries, analyses and interpretations of these transaction? and events and communicating the result^ to persons who must make decisions or form judgement.
Harold Bierman and Allan R. Dreblin
The purpose of accounting is to identify, measure, record and communicate the financial information of any business concern.
In the current environment of business and industry, the accounting system should totally sub serve a number of goals simultaneously. Such goals include and should be adoptable towards : taxation, creditworthiness, managerial efficiency, government policy, resource control, earning power, shareholders' satisfaction, public image, industrial peace, organisational growth, diversification, cutting losses, efficient use of equipment, portfolio selection, etc. In general, a few of the goals may be mutually conflicting. Management must have to be clear and, if need be, guided in prioritization and in balancing between conflicting goals. A separate (accounting) system for each goal requirement would only aggravate conflicts and make for chaotic decision-making with receding chances of reconciliation or accommodation amongst the goals. Reconciliation amongst goals shall never suffer sacrifice. In short, the accounting system should be comprehensive, objective and abide by, and contribute to, the realisation of the "total measurement of business as a continuing entity".
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