Definition of Accounting

 

Before attempting to define accounting, it may be made clear that there is no unanimity among accountants as to its precise definition. Anyhow let us examine three popular definitions on the subject:

Accounting has been defined by the american accounting association committee as:

“the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information”.

This may be considered as a 

good definition because of its focus on accounting as an aid to decision making.

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”.