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What Is Accounting?

Some people think of accounting as a highly technical field, which can be understood only by professional accountants. Actually everyone practices accounting in one form or another in almost daily basis. Accounting is the art of measuring, describing, and interpreting economic activity. No matter you are preparing a household budget, balancing your checkbook, preparing your income tax return, or running General Motors, you are working with accounting concepts and accounting information.

Accounting has often been called “the language of business”. Each investor, manager, and business decision-maker needs a clear understanding of accounting terms and concepts. The underlying purpose of accounting is to provide financial information for decision making about an economic entity. Business executives and managers need the financial information provided by an accounting system to help them plan and control the activities of the business.

Many businesses also compile nonfinancial information needed for decision making. An airline, for example, must have information about on-time arrivals, repair schedules, and physical examinations of flight crews. The use of computers makes it possible the operation of a management information system (MIS) which provides decision-makers with both financial and nonfinancial information. The accounting system is the most extensive and important component of a management information system because it is used by the entire business entity and by outsiders as well.

Vocabulary

professional[prə上feʃənI] adj. 专业的，职业的

accountant [ə上kauntənt] n. 会计师，会计员

executive [ig上zekjutiv] n. 执行人员，执行官

physical examination 体检

compile [kəm上paiI] v. 编写，编辑

extensive[ik上stensiv] adj. 广泛的，普遍的

entity [上entiti] n. 实体，统一体

budget [上bʌdʒit] n. （财政）预算

concept [上kɔnsept] n. 概念，观念

decision [di上siʒən] n. 决定，决策

provide [prə上vaid] v. 提供，供给

schedule [上ʃedju:I] n. 时间表，计划，安排

crew [kru:] n. （轮船、飞机或太空船的）全体工作人员，同事

component [kəm上pəunənt] n. 组成部分，成分

Exercises and questions

A. Answer the following questions based on the text.

1. Why has accounting been called “the language of business”?

2. What is the underlying purpose of accounting?

3. Is non-financial information necessary and important for accounting?

4. Why accounting system is the most extensive and important component of a management information system?

5. According to the text, is accounting a highly technical field?

6. In what aspects accounting functions in our daily life?

B. Make the following statements true or false according to the text.

1. Actually accounting is a highly technical and professional field. ( )

2. There is not any non-financial information for decision making in accounting. ( )

3. It’s unnecessary for us to understand the accounting concepts and terms, for we are not accountants. ( )