Accounting, Information, Functional definition of accounting and Operational definition of accounting

Q. What is AIS/Definition of Accounting, Accounting Information Systems and Book Keeping?

Accounting: Accounting is an information and measurement systems that identifies, records, classifies, summarizes the economic events of any organization and communicates relevant, reliable and comparable information to the interested users.

Information: Information is the processed data. In Accounting, transactions are raw data. Those data are being processed through journal, ledger, and trial balance, preparation of income statement, owner’s equity statement and balance sheet. After processing we get the output that is net income or net loss, total assets, liabilities and owner’s equity.

Q. Functional definition of accounting (Nov-2011).

Functional accounting:  Functional accounting is a method of accounting that is based on the organization’s major types of activities, primarily

a) Program or mission-based services and

b) Supporting services such as administration, governance and fund development.

 
Functional accounting allows you to identify three key characteristics of every dollar coming

into and going out of the organization:

	Dollars coming in (income)	Dollars going out (expense)
Who	Who is providing the dollar (i.e., the specific funder)	Who is paying for an expense (i.e., the specific funder)
What	What type of income it is (e.g., grant, contract, earned, etc.)	What the dollar will be spent on (e.g., payroll, supplies, etc.)
Why	Why they are providing the dollar (i.e., for which program or purpose)	Why the dollar is being spent (i.e., for which program or purpose) Administrative and Fundraising would be a Why as well.

Q. Operational definition of accounting (Nov-2011)

Operational definition: An operational definition, also called functional definition, defines something (e.g. a variable, term, or object) in terms of the specific process or set of validation
tests used to determine its presence and quantity. An operational definition is generally designed to model a theoretical definition .

Example of operational definition is as-

(a) Temperature

(b) Electric current

(c) Mechanical hardness

(d) Duck typing and so on.