ACC102 Chapter Notes - Chapter 1: Financial Accounting, Financial Statement, Deductive Reasoning
Document Summary
Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information. (american association of accountants) Accounting as an art: as a social science, accounting is a body of knowledge which has been systematically gathered, classified and organized, as a practical art, accounting requires the use of creative skills and judgment. Accounting identifies and measures economic activities, processes information into financial reports, and communicates these reports to decision makers. Accounting is often referred to as a language of business because it is fundamental to the communication of financial information. Practice of accountancy requires the exercise of creative and critical thinking. Creative thinking involves the use of imagination and insights to solve problems by finding new relationship (ideas) among items of information. It is most important in identifying alternative solutions. Critical thinking involves the logical analysis of issues, using inductive and deductive reasoning to test new relationships to determine their effectiveness.
