ACCOUNTING LANGUAGE, ART AND SCIENCE

Accounting Is the Language of Business

Every business organization that has economic resources, such as money, machinery, and buildings, uses accounting information. For this reason, accounting is called the language of business.

Accounting is considered an art

It requires the use of skills and creative judgment. One has to be trained in this discipline to be able to perform accounting functions well.

Accounting is also considered a science

It is a body of knowledge.

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What are business activities?

What Are Business Activities? Business activities include any activity a business engages in for the primary purpose of making a profit. This is a general term that encompasses all the economic activities carried out by a company during the course of business. Business activities, including operating, investing and financing activities, are ongoing and focused on creating value for shareholders . KEY TAKEAWAYS Business activities are any events that are undertaken by a corporation for the purpose of earning a profit. Operating activities relate directly to the business providing its goods to the market, including manufacturing, distributing, marketing, and selling; they provide most of the company's cash flow and hugely influence its profitability. Investing activities relate to the long-term use of cash , such as buying or selling a property or piece of equipment, or gains and losses from investments in financial markets and operating subsidiaries. Financing activities include

Aims of a business

o To Survive Many a times you find yourself fighting to survive. Sometimes your life is threatened by a certain sickness and you must do everything in your power to fight the disease and survive. It is the same thing with a business, it must survive. A business finds itself faced with tough competition and other things that threaten its survival. To survive means that the business is able to fight competition, gain new customers find reliable suppliers and grow. It is able to be successful and not fail. o To make a Profit If you were to start a business today, what would be your main objective? Most people start businesses to make a profit. This means that the business is able to sell its goods and services at a price above the buying price . The difference between the selling price and buying price is the profit. For example, if you bought a product at E20 and sold it at E50, the E30 is your profit. o To Grow or Expand Imagine a situation whereby there is a baby bor

Who are stakeholders in a business?

DEFINITION OF A STAKEHOLDER A stakeholder is someone who has an interest in the operations of a business. Stakeholders are affected by what happens inside and outside of a business. We usually refer to them as “ business stakeholders ”. These individuals or organizations have a direct or indirect interest in the affairs of the business or are affected by a business activity. Example of stakeholders include consumers, owners, employers, employees, managers, community, shareholders, financiers, government, competitors, trade unions, etc.

Scarcity

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