FUNCTIONS of Accounting

By definition the word “function” means a role, a task, or a job. The functions of Accounting and Accountants are implicit in the definitions provided by the Authoritative bodies. So, let’s go back to the definitions of accounting and deduce what these roles, tasks or jobs are. ASC or FRSC, as stated in the Philippine Accounting Standards (PAS) No. 1, defined accounting as: “Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic activities, that is intended to be useful in making economic decision.” And, the AICPA’s definition: “Accounting is 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.” Also, the definition of AAA: “Accounting is the PROCESS of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of information.” From the definitions provided, the FUNCTIONS of accounting and accountants may be inferred as follows:

As a Role : To provide quantitative information Meaning, the primary function of accountants is to prepare financial reports and provide them to internal or external users.

As Tasks or Jobs : o o o o o o o Interpreting In Accounting, financial affairs of entities undergo series of processes and activities such as identifying, recording and measuring transactions and events then classifying and summarizing them thru account devices and converting them thru report formats, then finally communicating and interpreting the reports to the users. These basically are the functions of accounting. Identifying Recording Measuring Classifying Summarizing Communicating

In summary, the role, or task or job or function of Accounting and Accountants then is about gathering of quantitative and economic information, then processing these financial data thru series of activities, and converting them into financial reports and give the reports to those who need the information for decisionmaking study and judgments. References :
Intermediate Accounting by Spiceland, Sepe, Nelson. McGrawhill, 2011 American Institute of Certified Public Accountants (AICPA) American Accounting Association (AAA) Accounting Standard Council (ASC)
Researched by WBBBB Accounting & Management Services. Click & visit our internet site: http://wbbbb-ams.blogspot.com/ ▪ Email us: wbbbb.ams@gmail.com ▪ Call/Text CP: 0917 767 78 56 / 0908 741 97 42 ▪ Call DL: 378 54 04 Services Offered: ▪ Business Registration ▪ Management Advisory Services ▪ Accounting/Bookkeeping ▪ Tax Advisory/Services ▪ Loans/Projects Proposals ▪ External Auditing ▪ Tax Returns ▪ Payroll Computation Services ▪ Financial Statements ▪ Financial Reports ▪ Assistance to SEC, BIR, SSS, Pag-ibig, Phil-health, etc ▪ Tutorials, Training or Consulting Services

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.