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Basic Fundamentals of Accountancy Accounting: The American Institute of Certified Public Accountants has defined accounting as “ the art of recording, classifying and summarizing, in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof". According to the American Accounting Association, "Accounting is the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information”. Features of Accounting: « Identifying: it means determining the business transactions to be recorded in the books of accounts. « Measuring: It means expressing the value of business transactions in terms of money. e« Recording: It means entering, in terms of money, business transactions as and when they occur. e Classifying: It refers to the grouping of entries to like nature into appropriate heads by posting them from the books or books of original entry to appropriate accounts in the books of final entry. *« Summarising: It means the presentation of the information found in the ledger accounts in the form of financial statements like the profit and loss account and the balance sheet at the end of the accounting period. « Analysis and interpretation: It means rearrangement of the information found in the financial statements in a suitable manner, and drawing meaningful conclusions about the profit, the financial position and the future prospects of the business. « Communicating: it means communicating the results of interpretation of financial statements to the end-users for decision-making. « Wide scope: It comprises a number of processes, viz., identifying the business transactions, measuring them in terms of money, recording them in the books of original entry, posting the entries in the books of original entry to appropriate accounts in the books of final entry, viz., the ledger, verification of the accuracy of the entries in the ledger accounts through the preparation of trial balance, preparation of financial statements like the profit and loss accounts and the balance sheet, analysis and interpretation of the financial statements, and communicating the results of the interpretations to the interested parties for decision-making. Accountancy: In the words of Eric Kohler, “Accountancy is the theory and practice of accounting". Characteristics: 1. Itis a discipline 2. Itis ascience. 3. It is concerned with the designing of the system to be adopted for recording and 
