Introduction to Principles of Accounting

Question 1

What is the difference between accounting and principles of accounts?

Answer 1

Accounting is a process of recording, interpreting, analysing and reporting financial information in the form of financial statements.

Accounts are the guidelines and general rules that businesses must follow when reporting all accounts and financial data.

Question 2

What is the purpose of accounting?

Answer 2

The purpose of accounting is provide information to the users of accounting information so that proper decision-making can take place.

Question 3

What are the qualities of good accounting information?

Answer 3

1. Clarity and understanding
2. Relevance
3. Accuracy and reliability
4. Comparability