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Accounting Objectives

Accounting is defined by several organizations as the process of identifying, measuring, and communicating financial information about economic entities to help users make informed decisions. It involves recording, classifying, and summarizing financial transactions and events in a standardized way using monetary units. Accounting serves as the language of business by communicating this standardized financial information. The objectives of accounting are to understand its definition, scope, evolution, users, specialized fields, concepts, conventions, and need for standards to ensure it conveys consistent meaning.

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14 views

Accounting Objectives

Accounting is defined by several organizations as the process of identifying, measuring, and communicating financial information about economic entities to help users make informed decisions. It involves recording, classifying, and summarizing financial transactions and events in a standardized way using monetary units. Accounting serves as the language of business by communicating this standardized financial information. The objectives of accounting are to understand its definition, scope, evolution, users, specialized fields, concepts, conventions, and need for standards to ensure it conveys consistent meaning.

Uploaded by

ddukem
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Definition and Objectives of Accounting:

Definition: Accounting has been defined by the


American Accounting Association Committee as: Accounting is the process of identifying, measuring and
communicating economic information to permit informed judgments and decisions by users of the
information.
The American Institute of Certified and Public Accountants Committee on Terminology defined accounting
as: 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.
Another popular definition on accounting was given by American Accounting Principles Board in 1970,
which defined it as: Accounting is a service society. Its function is to provide quantitative information,
primarily financial in nature, about economic entities that is useful in making economic decision, in making
reasoned choices among alternative courses of action.
Accounting is called the language of business. This designation is applied to accounting because it is the
method of communicating business information. The function of any language is to serve as a medium of
communication. Accounting duly serves this function. Like any other language, it is undergoing continuous
change in an attempt to discover better means of communications. To enable the accounting language to
convey the same meaning to all people it should be made standard. To make it a standard language
certain accounting principles, concepts and standards have been developed over a period of time. This
lesson dwells upon the different dimensions of accounting, accounting concepts, accounting principles
and the accounting standards.

Objectives of Accounting: The main objectives of accounting is to

Know about the history and evolution of accounting

Understand the definition of accounting

Comprehend the scope and function of accounting

Ascertain the users of accounting information

Know the specialized accounting fields

Understand the accounting concepts and conventions

Realize the need for accounting standards

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