Question

Accounting is a process of recording, classifying, summarising, analysing and interpreting the financial transactions and communicating the result thereof to the users of such information. State whether the statement is true or false.

• A. True
• B. False

Answer 1

The correct option is A True

Accounting starts with

-identifying a transaction and then recording in Journal

-then classifying in the ledger

-then summarising in final accounts

-then interpretation through Ratio analysis

-then finally communicating the information to the users of the financial statement.

Thus, the first step is identifying and the last step is communicating the information.