Basics of Financial Accounting- meaning definition nature and scope, Functions of Accounting, Nature, Objectives, Advantages and Limitations of Accounting, Users of Accounting

Meaning and Definition of Accounting, Functions of Accounting, Nature, Objectives, Advantages and Limitations of Accounting, Users of Accounting

1. DR.U.PRIYA Assistant Professor of commerce, Faculty of Science and Humanities, RMIST, Kattankulathur Financial Accounting

2. Meaning of Accounting Accounting is a discipline which records, classifies, summarises and interprets financial information about the activities of a concern so that intelligent decisions can be made about the concern.

3. Definition of Accounting According to AICPA (American Institute of Certified Public Accountants) it is defined 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 a financial character and interpreting the result thereof."

4. Functions of accounting

5. NATURE OF ACCOUNTING i ) Accounting as a service activity (ii) Accounting as a profession (iii) Accounting as a social force (iv) Accounting as a language (v) Accounting as science or art (vi) Accounting as an information system

6. OBJECTIVES OF ACCOUNTING 1. To keep systematic records 2. To protect business properties 3. To ascertain the operational profit or loss 4. To ascertain the financial position of the business 5. To facilitate rational decision making 6. Information System

7. Advantages of accounting Systematic records Preparation of financial statements Assessment of progress Aid to decision making Statutory requirements Information to interested groups Evidence in courts Taxation problems Merger of firms

8. Limitations of accounting Records only monetary transactions No consideration of price level changes No realistic information Personal bias of accounting affects the accounting statements Window dressing in Balance Sheet

9. USERS OF ACCOUNTING INFORMATION