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Accountancy is used to communicate financial information on businesses and other users such as managers and shareholders. This type of information is usually in the form of financial statements. These financial statements will display in money terms the economic resources which are under the control of the management.
Accountancy is a branch of mathematical science, and is extremely useful when uncovering the causes of any failure and success in business. There are three divisions of accountancy that are applied to businesses and these are book-keeping auditing and accounting.
The AICPA (American Institute of Certified Public Accountants) has defined accounting 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 financial character, and interpreting the results thereof."
It was shown that people from that time would use various accounting methods to record their number of herds and the growth of their crops. Since then accounting has evolved, and over the years accounting has improved immensely as businesses advanced.
Many early accounts were mainly to enable the memory of the businessperson and the audience for the account was the record keeper and the proprietor alone. There were many crude methods of accounting which proved inadequate for the problems which were created by a business entity that involved multiple investors. To address these problems, double-entry book-keeping emerged in northern Italy in the 14th century, at a time when trading ventures started to require more capital than a single individual could invest.
Accounting today is known as "the language of business "as it has become the vehicle for relaying financial information about a business entity to many different groups of people.
Management accounting is used to focus on people inside a business entity, and is employed to provide information to auditors, owner-managers, managers, and employees. Primarily it is concerned with providing a basis for making operating or management decisions.
Financial accounting provides information to people outside the business entity such as creditors, potential shareholders, financial analysts government agencies, and banks or vendors. The presentation of financial accounts is very structured owing to the different needs and requirements of these different users, and also governed by many more rules than management accounting.
Accountancy is a branch of mathematical science, and is extremely useful when uncovering the causes of any failure and success in business. There are three divisions of accountancy that are applied to businesses and these are book-keeping auditing and accounting.
The AICPA (American Institute of Certified Public Accountants) has defined accounting 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 financial character, and interpreting the results thereof."
It was shown that people from that time would use various accounting methods to record their number of herds and the growth of their crops. Since then accounting has evolved, and over the years accounting has improved immensely as businesses advanced.
Many early accounts were mainly to enable the memory of the businessperson and the audience for the account was the record keeper and the proprietor alone. There were many crude methods of accounting which proved inadequate for the problems which were created by a business entity that involved multiple investors. To address these problems, double-entry book-keeping emerged in northern Italy in the 14th century, at a time when trading ventures started to require more capital than a single individual could invest.
Accounting today is known as "the language of business "as it has become the vehicle for relaying financial information about a business entity to many different groups of people.
Management accounting is used to focus on people inside a business entity, and is employed to provide information to auditors, owner-managers, managers, and employees. Primarily it is concerned with providing a basis for making operating or management decisions.
Financial accounting provides information to people outside the business entity such as creditors, potential shareholders, financial analysts government agencies, and banks or vendors. The presentation of financial accounts is very structured owing to the different needs and requirements of these different users, and also governed by many more rules than management accounting.
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