Question

Since financial information is communicated in accounting terms, accounting is said to be the "language of business"

a. True
b. False

Answer 1

Accounting is indeed the "language of business" as it provides a standardized system for communicating financial information.

Step-by-step explanation:

True, accounting is said to be the "language of business" because it is the primary means of communicating financial information.

Just as language allows people to convey ideas and understand each other, accounting provides a standardized system for recording, analyzing, and interpreting financial transactions. It uses its unique vocabulary and concepts to communicate the financial health and performance of a business.

For example, financial statements such as the balance sheet, income statement, and cash flow statement are prepared using accounting terms and principles to communicate the financial position, profitability, and cash flows of a business.