The term “Accounting” is used with a fairly dense frequency in the accounting field, but not every student or candidate looking for an accounting job can explain “What is accounting?”. If you are also wondering with this question, let’s go with riclix.com to find the answer.
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Can you explain “What is accounting?
► What is accounting
?Accounting is the process of observing – measuring – calculating – recording economic activities to closely monitor and manage those activities.
To manage economic activities effectively, specific information is required. This information is collected from many different sources with many methods. In which, observation – measurement – calculation – recording are the main methods of information collection.
Observation: is the first stage, making the measurement of all costs and results of economic activities. Measurement results can be money, in-kind, or labor. Calculation: is the process of performing calculations, the methods of synthesis – analysis to determine the necessary criteria; through which the efficiency of economic activities can be seen. Recording: is the process of collecting – processing – recording the situation and results of economic activities in each period and location arising in an orderly manner. certain self.
Thus, the very process of observing – measuring – calculating and recording economic activities is called accounting.
Accounting is a process that includes many different methods of collecting information
► Learn 3 basic types of accounting
– Business accounting
Professional accounting is the process of observing – monitoring – reflecting each specific economic and technical operation in order to perform the regular and timely direction of those operations. The object of this accounting form is the economic and technical operations of production such as: the progress of the activities of supplying raw materials, the process of producing and consuming products; the situation of fluctuations and use of elements of the process of reproduction – business…
The feature of the type of business accounting is that it does not specialize in any one outcome measure, but is only based on the nature of each transaction – management requirements that use one of the three appropriate measures: cash, current, and cash. things or labor.
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Depending on each business, the business accounting uses an appropriate measure
With business accounting, it is only necessary to use simple means of collecting and transmitting information such as telephone or word of mouth. Because the subject is still general and only simple methods are applied, business accounting has not been considered an independent science.
– Statistical accounting
Different from professional accounting, statistical accounting is considered a science, studying “quantitative” factors in relation to “quality” factors of socio-economic phenomena with conditions such as: specific time and place. The purpose of this form of accounting is to derive the nature and regularity in the development process of those phenomena.
The object of statistical accounting can be: labor productivity increase, total output value, price situation, labor income… Also because of this is the information that is brought about by statistical accounting. only systematic but not regular and continuous. Along with that, the use of methods such as: statistical investigation, statistical division, average number, relative number, absolute number, index – makes statistical accounting need to use 3 types of outcome measures. fruit above.
Accounting accounting is often referred to as accounting – considered as a science of recognition – providing information about the use of assets, the movement of assets to measure the effectiveness of business activities. the entity’s arising financials.
Accounting accounting is referred to as accounting for short
Compared with professional accounting and statistical accounting, accounting accounting has the following characteristics:
Accounting monitors and reflects in a continuous – comprehensive – systematic way the current situation along with the fluctuations of all types of assets + sources of asset formation in the organization or unit. Thanks to that, accounting can continuously monitor the process before – during and after business activities, thereby evaluating the effective use of capital. all 3 types of outcome measures but still mainly monetary. This is reflected in the fact that all recorded economic – financial transactions are expressed in terms of money value. Thanks to that, accounting helps to provide general data, serving the management and implementation of economic and financial plans of the unit.
Although each of the above types of accounting has its own characteristics and implementation methods, in general, they are closely related in the process of performing the function of reflecting and managing the process of social reproduction of accounting. .
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riclix.com hopes that the information shared in this article has helped you answer the question yourself “What is accounting?”.