Discuss the various characteristics/attributes of accountancy.
Discuss the various characteristics/attributes of accountancy.
(i) Identification: It involves the identification of those transactions, which are of a financial nature and relate to the organisation.
(ii) Measurement: Only those business transactions and events, which can be quantified or measured in monetary terms, are considered.
(iii) Recording: Recording is the process of entering business transactions of financial character in the books of original entry. Once the economic events are identified and measured in financial terms, these are recorded in books of accounts in monetary terms and in a chronological order.
(iv) Classifying: It can be defined as the process of grouping transactions or entries of one nature at one place.
(v) Summarising: It involves presenting the classified data in a manner which is understandable and useful to various users of accounting statements.
(vi) Analysis and Interpretation: Analysing and interpreting the financial data helps users to make a meaningful judgment of the profitability and financial position of the business. It also helps in planning for the future in a better manner.
(vii) Communication: It involves communicating the financial statements to the various users i.e., management and other internal and external users.
(i) Identification: It involves the identification of those transactions, which are of a financial nature and relate to the organisation.
(ii) Measurement: Only those business transactions and events, which can be quantified or measured in monetary terms, are considered.
(iii) Recording: Recording is the process of entering business transactions of financial character in the books of original entry. Once the economic events are identified and measured in financial terms, these are recorded in books of accounts in monetary terms and in a chronological order.
(iv) Classifying: It can be defined as the process of grouping transactions or entries of one nature at one place.
(v) Summarising: It involves presenting the classified data in a manner which is understandable and useful to various users of accounting statements.
(vi) Analysis and Interpretation: Analysing and interpreting the financial data helps users to make a meaningful judgment of the profitability and financial position of the business. It also helps in planning for the future in a better manner.
(vii) Communication: It involves communicating the financial statements to the various users i.e., management and other internal and external users.
