Which of the following best describes accounting?
A) records economic data but does not communicate the data to users according to any specific rules
B) is an information system that provides reports to users regarding economic activities and condition of a business
C) is of no use by individuals outside of the business
D) is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements

Question

Quizplus · Accepted Answer

Accounting is an information system that involves recording, classifying, measuring, and communicating financial information to different users of financial information to help them make better-informed decisions. The system produces various financial reports such as the balance sheet, income statement, and cash flow statement, which are used by management, investors, creditors, and other stakeholders. Accounting is not just for taxes and financial statements for government reporting, but it plays a significant role in facilitating sound financial decisions within organizations.

Which of the Following Best Describes Accounting