Which of the following best describes accounting?
A) It records economic data but does not communicate the data to users according to any specific rules.
B) It is an information system that provides reports to users regarding economic activities and condition of a business.
C) It is of no use by individuals outside of the business.
D) It is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements.

Question

Quizplus · Accepted Answer

Accounting is an information system that collects and records economic transactions, summarizes the information in financial statements, and provides reports to users about the financial condition and performance of a business. These reports are prepared in accordance with specific accounting rules, standards, and principles to ensure consistency and comparability of information. Accounting information is used by various stakeholders, including investors, creditors, government agencies, and internal management, to make informed decisions about the business.

Which of the Following Best Describes Accounting