Identify which term that does not describe the term accounting.
Answer to Problem 1STQ
Option B (Is an end rather than a means to end) is the correct answer.
Explanation of Solution
Accounting:
Accounting is a system, or a process of collecting and organizing economic transactions, analysing, and summarizing the transactions into reports, and communicating the relevant information to the users.
Justification for incorrect answer:
Option A:
Accounting is used a tool for communicating the result of all type of business activities undertaken by the company, as a result they are described as the language of business. Option A stating accounting as language of business. Hence, this describes the term accounting. Therefore, Option A is an incorrect answer.
Option C:
Accounting helps in providing information that is useful for making good decisions. Option C stating “useful for decision making” describes the term accounting. Therefore, Option C is an incorrect answer.
Option D:
Accounting helps in providing information that is useful for making good decisions and Accounting is used a tool for communicating the result of all type of business activities undertaken by the company, it is used by business organization, governmental agencies, non-profit organizations, and individuals. Option D stating accounting used by the “business organizations, governmental agencies, non-profit organizations, and individuals” describes the term accounting. Therefore, Option D is an incorrect answer.
Justification for correct answer:
Option B:
Accounting helps in providing information that is useful for making good decisions. It is emphasized that accounting is “not an end”, but rather “it’s a mean to an end”. Option B stating “accounting is an end rather than a means to end” does not describe the term accounting. Therefore, Option B is the correct answer.
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Chapter 1 Solutions
Financial Accounting
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