Chapter 1, Problem 1QC

To determine

Accounting: Accounting is a system, or a process of collecting and organizing economic transactions, analyzing, and summarizing the transactions into reports, and communicating the relevant information to the users.

To find: The correct definition of accounting

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answer:

Accounting system includes the following activities:

• Collecting and organizing economic transactions
• Analyzing, and summarizing the transactions into reports
• Communicating the relevant information to the users

Hence, (d) is the correct option because all the activities are included in accounting system.

Explanation for incorrect answers:

• Option (a) is incorrect because measuring business activities alone is not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).
• Option (b) is incorrect because communicating the results to decision makers is alone not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).
• Option (c) is incorrect because processing information into reports alone is not accounting. Accounting refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Hence, the correct option is (d).