5 Easiest Definition of Accounting | Financial Accounting

INTRODUCTION 
 
The basic objective of Commerce Education is to produce skilled office workers for various business concerns. As such this field includes the subjects like E-commerce, Banking, Insurance, Shorthand, Information Technology, etc. All these subjects are related to various activities of business organizations. 

Accounting is one of the important subjects in this field. In this subject, the learner is given the education and training for preparation of vouchers, and invoices and recording them in the appropriate book for classification of the business transactions in identical groups, making a summary statement for analysis and comparison, and ascertaining results of the business after certain periods. 
 
The knowledge of all these process is called “Principles of Financial Accounting”, In this book, we shall proceed step by step to learning these methods and principles. 
 
DEFINITION OF ACCOUNTING 
 
"Accounting" deals with the communication of the business activities of a firm to individuals and various sections within the firm and also to outsiders. In other words, it is the art of recording all the business transactions and events of the financial character in a prescribed manner, classifying them in a significant manner. This classified record is analyzed to prepare summary results that are communicated to the concerned parties in the shape of reports and statements.  
This technique of recording, the process of identifying, method of measuring, and language of communicating business transactions is known as "Accounting". Some very important definitions of "Accounting" are given below: 
 
1- "The act of recording, classifying, analyzing, summarizing, and interpreting financial information”. Dupree & Marder. 
 
2- "The art of systematically recording, presenting and interpreting the financial information of an enterprise". MacFarlane, Ayres, and Stove. 
 
3- "Accounting is the process of identifying, measuring and communicating economic information to permit, informed judgment and decision by the user of the information”. American Accounting Association. 
 
4- “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 financial character, interpreting the results thereof." A Committee of Institute of Public Accountants. 
 
5- "The art of recording, classifying and summarizing the business transactions and finally, to prepare the financial statements, i.e., Income Statement and Balance Sheet." 
 
From the above definitions of accounting, we can ascertain that Accounting mainly Concerned with: 
 
1-Recording of business data 
2-Classification of recorded data 
3-Analysis of summarized data. 
4-Preparation of statements and reports.