Characteristics of accountancy ?

Following attributes or characteristics can be drawn from the definition of Accounting:

(1) Identifying financial transactions and events

• Accounting records only those transactions and events which are of financial nature.
• So, first of all, such transactions and events are identified.

(2) Measuring the transactions

• Accounting measures the transactions and events in terms of money which are considered as a common unit.

(3) Recording of transactions

• Accounting involves recording the financial transactions inappropriate book of accounts such as Journal or Subsidiary Books.

(4) Classifying the transactions

• Transactions recorded in the books of original entry – Journal or Subsidiary books are classified and grouped according to nature and posted in separate accounts known as ‘Ledger Accounts’.

(5) Summarising the transactions

• It involves presenting the classified data in a manner and in the form of statements, which are understandable by the users.
• It includes Trial balance, Trading Account, Profit and Loss Account and Balance Sheet.