FA – Nov 2013 – L1 – SA – Q5 – Scope and Purpose of Accounting

Identifying the best definition of the concept of accounting.

Question

Which of the following best defines “the concept of accounting”?

A. An activity performed by accountants
B. A system comprising several interrelated and interdependent parts
C. A technique of management
D. A discipline of study
E. A process of handling information of economic nature, which is useful and adaptive to varying situations

Answer

E. A process of handling information of economic nature, which is useful and adaptive to varying situations

Explanation:
Accounting is not merely an activity or technique but a comprehensive process that involves collecting, processing, and communicating financial information that is relevant for decision-making and adaptable to different circumstances.

Tags: Accounting Concepts, Accounting Definition, Financial Information
Level: Level 1

Topic: Scope and Purpose of Accounting
Series: NOV 2013

Uploader: Theophilus