DEMYSTIFYING ACCOUNTING: DEFINITIONS, FUNCTIONS AND REAL-WORLD APPLICATIONS.
INTRODUCTION: This paper is put together to share knowledge with students of accounting in high schools, tertiary institutions, accounting practitioners, managers with no or limited accounting background, and other people interested in accounting. DEFINITION OF TERMS: Accounting is the art of recording, classifying, and analyzing financial transactions. Accounting is defined by Frank Wood and Alan Sangster (Frank Wood's Business Accounting 1, 12th edition @ Pearson Education Limited 2012) as 'The process of identifying, measuring and communicating economic information to permit informed judgment and economic decisions by users of that information'. The keywords in this definition are explained below: 1. The process of identifying: Identification means determining what transactions are to be recorded and what should not be recorded. That is items or elements of financial character or nature that are to be recorded and non-financial items or elements in nature ...