Question

Accounting is often referred to as "the language of business." Explain in your own words what that expression means.

Answer 1

The expression that "accounting is often referred to as the language of business means :

Accounting is a form of bookkeeping which is related only to a business and using accounting all the records of the business are kept.
For the presentation of any organisations working, accounting is used as a common language for better understandings. There are financial statements to be prepared of an entity which represents the profitability and solvency of such entity. Such financial statements can be prepared only using accounting.

Various stakeholders and investors who are interested in a business relays on financial statements of such business. Here, accounting as a language of business plays a very crucial role in communication between such stakeholders and business.
As such any language have certain rules and regulations, accounting as a language of business also requires certain rules and regulations to be followed in preparation of financial statements of an entity. If not followed there may be fine and penalties.
Accounting requires certain Generally Accepted principles to be followed.

Further accounting is also used by the business for better understanding of its workings and financial position.