What is Accounting?

The purpose of accounting:

(1)to identify, record, and communicate the economic events of an

(2)organization to

(3)interested users.

Three main activities of Accounting:

(1)Identification

(2)Recording

(3)Communication

After those 3 main activities are conducted, the last is to analyze and interpret for users

After the purposes and the three main activities of accounting are described and defined, then the main question is "What is accounting?"

Accounting has a purpose to identify, record and communicate economic events of organization to interested users. So, if it is seen from the 'helicopter view', it can be seen that accounting is a service activity, to communicate the economic events for users in need.

Therefore, Accounting is a "service activity, conducted to give necessary financial and economic information to users, both internal and external users".

There are some users who use the information given by accounting, which are:

Internal Users:

• Finance
• Human Resources
• Management
• Marketing
• etc.

External Users:

• Taxing Authorities
• Customers
• Labor Unions
• Creditors
• Regulatory Agencies
• Investors
• etc.

Resource: Financial Accounting IFRS Edition, by Weygandt, Kimmel and Kieso