Introduction to Accounting and Accounting Process

Flashcards covering the definition of accounting, the father of accounting, and the steps involved in the accounting process.

Luca Pacioli

Recognized as the Father of accounting (1494 - 1512 AD).

Accounting

It is a process of identification, measurement, recording, classification, summarization, analysis and communication of relevant information to the interested users.

Identification of transactions

The first step in the accounting process, which involves recognizing financial transactions.

Measurement

The second step in the accounting process, defined as determining the value of transaction.

Recording

The third step in the accounting process where transactions are written in the books of accounts.

Classification

The step in the accounting process used to group up similar nature of transactions.

Summarization

The step in the accounting process used to prepare financial statement (important part of business).