Definition of accounting, Managerial Accounting

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Definition of accounting

Accounting is the procedure of recognizing measuring and communicating economic information to allow informed judgments and decisions by the user’s information.

It is therefore anxious with providing information which will help decision makers in making fine decisions.

To understand accounting one should understand:

•    The attributes of fine information
•    Procedure of measuring and communicating information
•    The decision making procedure
•    Users of information

Users of information

The users of information can be sub-divided into two groups:

1) Internal users who are parties in the organization e.g. the management or the staff.

2) External users who on the other hand, are parties outside the organization e.g. the shareholder, creditors, government, customers, etc.


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