Lesson Summary-Introduction to Accounting
General purpose statements provide information to satisfy the common information needs of many users. Information is the ultimate output of financial accounting, with quality expectations among the users of financial information. Achieving the desired quality requires the presence of certain characteristics. Accounting principles, standards, and processes are designed to result in these characteristics. Learning these principles start with meaningful definitions that provide insights into the nature and activities of accounting.
Accounting has several widely accepted definitions, each emphasizing certain perspectives. The most common definitions refer to accounting as a process of recording, a system, and a body of knowledge. Each definition explains accounting from a certain perspective, mostly about what accounting is, its structure, and how it is done.
Accounting as a service establishes a connection between the users of accounting information and the development of standards. This service concept takes into consideration the importance of customer expectations, specifically the quality of the information that accounting provides. Accounting standards ensure that accounting’s customers get the quality they expect.
Accounting is quantitative, financial in character, and an analytic discipline. These characteristics are inherent in its service nature that requires computation, and analysis of financial information. Like all other professions, accounting performs activities towards accomplishing its objective, following a structured process based on a formal system. It determines values and communicates information to decision makers.
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