Understanding Accounting: Language of Business and

School: University of South Carolina - Course: ENGL 287 - Subject: Accounting

Accounting is called thelanguage of businessbecause all organizations set up an accounting information system to communicate data to help people make better decisions. Accounting serves many users who can be divided into two groups: external users and internal users. •Shareholders •Lenders •External auditors •Nonmanagerial employees •Regulators The process by which accounting provides information to users is as follows: •Identify users. •Assess users' information needs. •Design the accounting information system to meet users' needs. •Record economic data about business activities and events. •Prepare accounting reports for users.• Purchasing managers • Human resource managers • Production managers • Research and development managers • Marketing managers

Accountingis an information and measurement system that identifies, records, and communicates an organization's business activities. •Identifyingbusiness activities requires that we select relevant transactions and events. •Recordingbusiness activities requires that we keep a chronological log of transactions and events measured in dollars. •Communicatingbusiness activities includes preparing accounting reports such as financial statements, which we analyze and interpret.