Why Accounting is called the Language of Business

Many famous writers of Accounting of the world have regarded Accounting as the language of business.

Man expresses his feelings through language in written and verbal form, similarly various information of the business organization are expressed and presented through accounting statements.

In language, efforts are made to express a particular feeling using words one after another.

Similarly in accounting financial transactions are recorded in books of accounts and there from preparing financial statements various financial information are communicated to concerned persons.

Accounting furnishes all information about past events, current activities and future possibilities of a business. Recording and analyzing past and present financial events,

Accounting presents and communicates various information in the form of statements and reports to the interested parties like owners, employees, management, investors, buyers, sellers etc.

From these accounts, statements and reports, parties concerned can evaluate their success-failure, financial solvency -insolvency etc. Of course, having sound command over accounting language one can understand these information.

These financial statements are meaningless to those who do not have knowledge of accounting, in the same way as newspaper is a bundle of papers to an illiterate person.

So, Accounting functions like a language. One may think it is not apt to compare Accounting with language but actually it is not so.

Shorthand is a language but the persons who are ignorant of it cannot understand this symbolic language. Similarly it is not illogical to term accounting as a language of business.

It is meaningless to those who are ignorant of this discipline. No language in the world is universal. Similarly accounting language also is not understandable to all.

With the changes of society and human life languages are changing. Similarly with the advancement and complexity of business accounting language is changing gradually. Therefore, it is apt to say, Accounting is the language of business.