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Accounting: Language of Business

Question: Why is accounting often referred to as the "language of business". What are generally accepted accounting principles (GAAP)? Who currently develops and issues GAAP? What is the purpose of GAAP?

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Why is accounting often referred to as the "language of business"?
Accounting is the universal language of business, spoken around the world by business and government leaders, investors, analysts, and others seeking to measure, understand, and apply the dynamics of financial success.

Source: http://www.bus.iastate.edu/accounting/

An understanding of this language can enhance one's performance in the business world as management decisions are made within the company or financial decisions about the company are made by outside parties. The financial health of a company is communicated to the outsiders by accounting statements only. Therefore, the place of accounting in business environment is of utmost importance.

It can convey the economic activity and condition of a business to its stakeholders. That stakeholder may be ...

Solution Summary

The solution explains why accounting is often referred too as the language of business. The generally accepted accounting principles is discussed.