Accounting can be defined as an act recording classifying, summarizing and reporting of business transaction for preparation periodic statement of performance and caused to provide information to management for decision making.
It’s an act of controlling a business by keeping records, preparing form those records certain statistics called ‘ accounting ration” and using those rations to detect financial difficulties before they become serious and uncontrolled so that certain measures may be taken.
One of the objectives of a business is to make a profit and we defined a profit as a function of how the resources of the business in terms of manpower, raw material, capital are employed. One of the chief aims of accounting is to reveal whether or not a business is been conducted profitably.
Accounts, collects from those which relates to past performance and termed is historic accounts and prepared for stewardship purposes that is satisfy in the shareholders, government, creditors as well as the public as large, that the business has been conducted honestly and efficiently over the period of which the account is related.
This aspect is called financial accounting.