ACCOUNTING: Theories and Definitions

Question 1

it is the medium of communication between a business firm and the various parties interested in its financial activities, its stakeholders.

Answer 1

Accounting as the Language of Business

Question 2

“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 results thereof.”

Answer 2

1941, the American Institute of Certified Public Accountants (AICPA)

Question 3

emphasizes more on the accountant’s creative skills and ability to apply his accounting knowledge to a given problem than on the extent of his knowledge

Answer 3

ACCOUNTING AS AN ART

Question 4

Accounting is governed by rules, principles,
postulates and theory

Answer 4

ACCOUNTING AS A SCIENCE

Question 5

The quantitative financial information to decision makers who need to make “reasoned choices among alternative uses of scarce resources in the conduct of business and economic activities.

Answer 5

ACCOUNTING AS A SERVICE ACTIVITY

Question 6

Since the rules, principles, postulates and theory that are used in accounting are
not exact and are constantly adapting in the overall situations this means that…

Answer 6

Accounting is not an
exact science

Question 7

He is concerned not only with record keeping
but also with a whole range of activities involving planning and problem solving;

Answer 7

The modern accountant

Question 8

a system of recording and summarizing business and financial
transactions

Answer 8

Accounting

Question 9

Writings discovered by archaeologists on clay tablets from Egypt and Mesopotamia dating back as early as 3300 to 2000 BCE

Answer 9

Accounts of ancient tax records

Question 10

He is known as the father of accounting and bookkeeping

Answer 10

Luca Pacioli