Answers.com > Wiki Answers > Categories > Business & Finance > Business and Industry > Business Finance > Define accounting and principles of accounting?

Define accounting and principles of accounting?

In: Business Finance, Accounts Payable [Edit categories]

Answer:

Accounting is the process of communicating financial information about a business entity to users such as shareholders and managers.

Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as, "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, and interpreting the results thereof."

The principles of accounting are basically the rules and regulation set by a committee, in the U.S.A. these rules are set by the Financial Accounting Standards Board (FASB) and are referred to as Generally Accepted Accounting Principles (GAAP).

In short the GAAP is a codification of how a business prepare and present their business income and expenses, assets, and liabilities on their financial statements.

Contributor:

JosephAllen2005

First answer by Abitha6. Last edit by JosephAllen2005. Contributor trust: 113 [recommend contributor ]. Question popularity: 1 [recommend question].

[report abuse]

Can you answer these Business Finance questions?

	What are the possible problems with speculation?	Answer it!
	Is high employee good or bad?	Answer it!
	What is the circular flow of money?	Answer it!
	Do auditor and economist relate?	Answer it!
	Who is the tracking specialist?	Answer it!

Relevant answers:

Why accounting principles are important in accounting cycles?
The Accounting Principles are the assenition rules of accounting and the application of these rules, method & procedures to actual practice of accounting. These Accounting principles have...
What are accounting principles?
The Accounting Principles are the assenition rules of accounting and the application of these rules, method & procedures to actual practice of accounting. These Accounting principles have been...
What are the principle of accounting?
The basic principle of accounting is to identify, record, and communicate financial transactions. The simple form of the basic accounting equation is assets equals liabilities plus equity (be it...
Principles of accounting?
Accounting principles are those rules and concepts that are generally accepted as standards for the field of accounting. These are standardized by governing bodies such as GAAP and IASB. Few core...
What are principles of accounting?
1. Revenue Recognition PrincipleIt dictates that revenue should be recognized in the accounting period in which it is earned.2. Matching Priciple(Expense Recognition)It dictates that expenses be...