Social Accounting- Accounting that Relates Society

Social accounting

Social accounting (also known as social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting, or sustainability accounting) is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large.

Social accounting is commonly used in the context of business, or corporate social responsibility (CSR), although any organisation, including NGOs, charities, and government agencies may engage in social accounting.

Social accounting emphasises the notion of corporate accountability. D. Crowther defines social accounting in this sense as "an approach to reporting a firm’s activities which stresses the need for the identification of socially relevant behaviour, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques."

Social accounting is often used as an umbrella term to describe a broad field of research and practice. The use of more narrow terms to express a specific interest is thus not uncommon. Environmental accounting may e.g. specifically refer to the research or practice of accounting for an organisation's impact on the natural environment. Sustainability accounting is often used to express the measuring and the quantitative analysis of social and economic sustainability.

Accounting as a Language of Business

Accounting: The Language of Business:

Accounting has been called the language of business. Throughout our early education we learned the vocabulary and other basic elements of the English language, or another language, so that we would be able to communicate effectively. The purpose is the same for accounting. Most of you will not become accountants. You may be self-employed or employed by others in a business (a manager, banker, or investor) and will use accounting information, whether you know it or not.

In order to understand and to use accounting information most effectively, you must have a solid grounding in its fundamentals. The finer points of accounting are things that you will probably never encounter in your business transactions, but you will know how to read those important financial statements and how to effectively use the material that will emanate from your computerized financial system.

Accounting information has been useful for hundreds of years. The double-entry framework was first described in a book written by Luca Pacioli, a fifteenth-century Italian monk and mathematician, although its origins can be traced back another 300 years. The formal structure for processing financial transactions is at least 700 years old.

Accounting as an Aid to Management

Accounting as an aid to management:

The main object of Accounting is to record financial transaction systematically in the books of accounts and to find out profit-loss and financial position of a business. Ascertainment of profit-loss and financial position, interpretation and analysis of accounts and statements, development of accounting system, collection of statistical and economic data, formulation of financial principles and financial planning and controlling result as per plan etc. are the main function of accounting. In the modern age accounting is directly related with financial management. The function of management are planning, organizing, collecting business elements, motivating, coordinating and budgeting etc.

Accounting helps the management in the following ways:

What is Accounting Information System? Who are the users of accounting information? How do they use it?

Accounting information: Accounting information as quantitative information about economic entities that are useful for making economic decisions in determining the choices between the alternatives of action. The use of accounting information for strategic planning, management control and operational supervision. Information is essentially financial accounting and mainly used for the purpose of decision making, supervision and implementation of corporate decisions. For financial data can be put to good use by internal and external parties, then the data must be arranged in the appropriate forms. Accounting information is classified into three types: (a) information operations, (b) management accounting information, and (c) financial accounting information.

The different types of journal entries

Journal: An accounting record where all business transactions are originally entered. A journal details which transactions occurred and what accounts were affected. Journal entries are usually recorded in chronological order, and using the double-entry method of bookkeeping.

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Principles of Accounting- What & Why ???

Accounting is a consistent method of organizing information that makes it possible for you to compare results across periods and industries. If you think of money as the currency of business, then accounting is the language of business. It is this common language that allows you to have confidence in making decisions and forming relationships that are at the heart of every successful business. But what are the grammar of this language of business? The basic principles of accounting are essentially the general decision rules, which govern the development of accounting technique. On the basis of these assumptions of accounting, the following basic principles of accounting have been developed: