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Horngren's Financial & Managerial ...

5th Edition
Tracie L. Miller-Nobles + 2 others
ISBN: 9780134078939

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Chapter
Section
BuyFindarrow_forward

Horngren's Financial & Managerial ...

5th Edition
Tracie L. Miller-Nobles + 2 others
ISBN: 9780134078939
To determine

Accounting: Accounting is a system, or a process of collecting and organizing economic transactions, analyzing, and summarizing the transactions into reports, and communicating the relevant information to the users.

To find: The correct definition of accounting

Answer
(d) All the above

Explanation

Explanation for correct answer:

Accounting system includes the following activities:

  • Collecting and organizing economic transactions
  • Analyzing, and summarizing the transactions into reports
  • Communicating the relevant information to the users

Hence, (d) is the correct option because all the activities are included in accounting system.

Explanation for incorrect answers:

  • Option (a) is incorrect because measuring business activities alone is not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).
  • Option (b) is incorrect because communicating the results to decision makers is alone not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).
  • Option (c) is incorrect because processing information into reports alone is not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).
Conclusion
Hence, the correct option is (d).

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