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Additional Details
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damond g | Why is accounting often referred to as the “language of Business? |
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Sewer Gas
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Money IS business.... |
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gtpmaster61@sbcglobal.net
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Because accounting is not a logical thought process, that was the very first thing my accounting teacher told us, and depending on whether you want to show a profit or a lose can all be done with accounting. |
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Money_bags
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I would assume that it is because Accounting is a foundation upon which all business is built, hence the verbage of accounting attaches to the language of business itself. Without an accounting framework, no business could be successfully conducted. |
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Serge M
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The purpose of business is to earn money. Accounting is the process of measuring the amount of money flowing through a business, analyzing the results, and interpreting them for decision makers. This is done by means of financial reports that use specific terminology which decision makers must understand in order to understand the financial statements produced by the accounting system. Accounting terminology is quite precise with many terms having specific meanings that may be understood incorrectly by laymen not conversant in accounting terminology. For example, many people understand the terms cost and expense to mean the same thing, but in business they have quite different meanings. The term credit has a specific meaning in accounting and in business that is quite different from what you may believe it means.
Business students are required to take accounting courses, and it is not surprising that these are the first business courses they take, because the introductory accounting courses introduce students to the terminology of accounting that business people must understand. This terminology is used in all other business courses taken by students before graduation. |
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IM Krazey
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Accounting is refererred to as the 'language of business' because this is how businesses communicate on a factual level with their investors, markets and people in general. Annual reports and interim financial statements are prepared by accounting firms on behalf of their client companies and these statements form the basis for the business to communicate its performance, management, risk management and other related issues to the public. Market analysts use accounting ratios of a company to support their opinions on that company's future prospects.
We also use language to hide things or exercise tact, in this context, accountants tweak figures to adjust them in the statements such that it becomes very difficult for the uninitiated investor to decipher what has actually happened.
For example, damages or settlements due to lawsuits can be included in 'other costs' without giving details of these costs. |
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