The word Accounting means counting. It is related with the counting of monetary transactions (Quantifiable transactions in which money is involved in an event and which can be measured in terms of money) only. So, it deals with those events which are converted into monetary transactions or can be expressed or measured in terms of money. For example, goods bought for $1,000 is a monetary transaction, so it is counted and recorded in the books of accounts but "The company will launch new product into the market" is not a monetary transaction as there is no involvement of any money. Now, we are in a position to explain what is accounting in today world companies. Every organization, whether profit or non profit, requires proper recording of economic transactions in a classified and summarized way so that these are assessed by users of accounting information (owners, management, investors, government, law authority, etc.) in making economic decisions. The accounting does that wor...
The word Accounting means counting. It is related with the counting of monetary transactions (Quantifiable transactions in which money is involved in an event and which can be measured in terms of money) only. So, it deals with those events which are converted into monetary transactions or can be expressed or measured in terms of money. For example, goods bought for $1,000 is a monetary transaction, so it is counted and recorded in the books of accounts but "The company will launch new product into the market" is not a monetary transaction as there is no involvement of any money. Now, we are in a position to explain what is accounting in today world companies. Every organization, whether profit or non profit, requires proper recording of economic transactions in a classified and summarized way so that these are assessed by users of accounting information (owners, management, investors, government, law authority, etc.) in making economic decisions. The accounting does that wor...