Chapter 1, Problem 1STQ

To determine

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.