Chapter one

1.1            Introduction

Many people think of accounting as a highly technical field which can be understood only by professional accountants.  Actually, nearly everyone practices accounting in one form or another on an almost daily basis

We live in an era of accountability.  Although, accounting has made sits most dramatic progress in the field of business, the accounting function is vital to every unit of our society.  An individual must account for his or her income,  and must supply personal accounting information in order to buy a car or home to qualify for a college scholarships to secure a credit card, or to obtain a bank loan.  Large corporations are accountable to their stockholders, to government agencies, and to the public.  The federal government, the states, the cities, the school district: all must use accounting as a basis for controlling their resources and measuring their accomplishments. Accounting is equally essential to the          successful operation of a business, a university, a polytechnic and a social program.

1.1.1    DEFINITION OF ACCOUNTING:

Okechukwu (1999), defined accounting as, “the art of recording, classifying and summarizing, analyzing, interpreting and reporting on the financial transactions and position of an organization to interested persons or bodies.”  He gave this definition because whenever two or more persons comes together to form a union or an organization, the next thing is that money must be involved. Also, the accurate recording of the financial dealings of the companies, as well as the  correct reporting of the financial results of the union’s activities for a period to the members of that union, and to outsiders become of paramount importance.

Amachina and Ezeh (1996), defined accounting as, “a profession that co-ordinates the functions of financials accounting which is concerned with the recording, analyzing, summarizing and interpretation of business and other entities”.

Okafor (1996), defined accounting as “a systematic means of writing of economic history and plans of an organization in both quantitative and financial manner so that facts can be revealed, and properly analysing such fact for the purpose of advising management.

1.2.2    OTHER AREAS OF ACCOUNTING INCLUDES

a.                 MANAGEMENT ACCOUNTING

Osuagwu (1998), defined management accounting as, “ sthe application of accounting knowledge, technique and skills to the provision of information designed to assist all levels of management in planning and controlling the activities of a business enterprise.”

Moreover, sthe chartered institute of management accountant (CIMA) defines management accounting as, “ an integral part of management concerned with identifying, presenting, and  interpreting information used for formulating strategy, planning and controlling activities, decisions taking optimizing the use of resources, disclosure to shareholders and other external to the entity, disclosure to employees and safeguarding assets.

b.                COST ACCOUNTING:

Onovo et al (2002), defined cost accounting and costing principles, methods and techniques in the ascertainment of costs and the analysis of savings and excesses as compared with previous experirence with standards.

Nze (1998), defined cost accounting as, “The accopunting of the cost of production of goods or services or both of them”.