Definition and Nature of Accounting

Question 1

How does AICPA define accounting?

Answer 1

Accounting is an art.

Question 2

Why is accounting considered an art?

Answer 2

Because it requires creativity and skill in carrying out the accounting process

Question 3

What is the primary goal of accounting?

Answer 3

To provide useful financial information for decision-making

Question 4

What are the Latin roots of the terms “debit” and “credit”?

Answer 4

Debitum (debit): “What is due”

Creditum (credit): “Something entrusted to another or a loan”