Choosing the right Accountant for your business!
An Introduction to Accounting
What is Accounting?
The Primary role of accounting is to provide reliable and relevant financial information for decision making. Accounting has been around for centuries and has developed significantly since its humble beginnings in ancient times when scribes recorded simple agreements between parties, and other information, on clay tablets. Today almost every person engages in business transactions in relation to the financial aspects of life such as purchasing products and paying bills. This means that accounting plays a significant part in society.
Accounting is “The language of business. It is a public means of communication where information flows from one party to another. For information to be effective it must be understood. Accounting, like many other professions, has its own terminology or jargon which is unique to the profession and can have alternative meanings in different context. Accounting Terms, concepts and symbols are used to provide financial information to a variety of users including managers, shareholders and employees.
The Accounting Process
Accounting is the process of identifying measuring, recording and communicating the economic transactions and events of a business operation.
Bookkeeping forms the foundation of the activities underlying accounting and these processes today extend far beyond preparing accounting records.
Diverse Roles of Accountants
Internal Users of accounting information are Managers who plan, organise and run the business. They do not need to rely on general purpose financial reports as they can obtain the financial information they need internally. EG: Directors, Supervisors and Managers.
External Users are resource providers and have an interest in financial information about the three main types of activities, financing, investing and operating.