enoVO CengageNOWv2Online tex e Calculator Which of the follo

enoVO CengageNOWv2|Online te..x e Calculator Which of the following best describes accounting? a. Is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements Ob. Is an information system that provides reports to users regarding economic activities and condition of a business c. Is of no use by individuals outside of the business Od. Records economic data but does not communicate the data to users according to any specific rules

Solution

Introduction:

Accounting is the systematic process by which the financial information is recorded, processed, interpreted and the financial results are communicated. Accounting is based on systematic procedures and there are various principles, rules and standards which govern the accounting of financial information. Also, the accounting helps various stakeholders like

- the management - For interpretating the profitability of the business.

- the government authorities- For taxation and other purposes

- investors - to interpret the profitability of the company

- banks - to interprete the ability of the company to repay loans.

Solution:

Based on the above meaning of Accounting the correct answer to the question above is

b. is an information system that provides reports to users regarding economic activities and condition of a business.