Knowt
Accounting
OVERVIEW
Accounting is the backbone of the business financial world.
Accounting provides information that helps people in business increase their chances of making decisions that will benefit their companies.
Accounting is the language of business, and like other languages, it has its own terms and rules. Understanding this language and learning to interpret it is the first step to becoming successful in an owned business and in every personal financial life as well.
Accounting is the conscious of the business world. When handled with care and with respect, it performs as expected. When abuse occurs, and the system is circumvented or overridden because of dishonesty and greed, it doesn't work correctly.
HISTORY
Accounting is considered one of the oldest profession.
Earliest Accounting was found as early as 2000 BC in the cities of Babylonia, Greece, Egypt and 3500 BC in Assyria. It consisted then of records of taxes imposed by the kings and collected from the people by their tax collectors as well as records of materials, labor, and overhead which the pharaoh required when the pyramids were being constructed in Egypt.
Babylonia was known as the city of commerce. Accounts were used for business to uncover losses due to fraud and to uncover losses due to inefficiency.
In the ancient Egypt, the accountant was called as "eye and ear" of the king. Archeologist Dr. Gunter Dreyer of the German Institute of Archeology discovered that the numerous inscribed bone labels attached to bags of oil and linen in the tomb of king scorpion, Egypt-date back 5300 years
In ancient Mesopotamia, Accounting token made of clay, from Susa - this is represented a huge cognitive leap of mankind.
In ancient Rome, government and banking accounts grew out of records keep by the heads of the families. They also used memorandum or day book (adversaria) to record receipts and payments and posted to ledgers or cash books (codex acepti et expensi) on monthly basis (700BC-400BC). By the time of the Emperor Augustus, the Roman government had access to detailed financial information.
In India, Chanakya wrote a manuscript similar to a financial management book, during the time of Mauryan Empire. His book "Arthashasthra" contains few detailed aspects of maintaining books of accounts for a Sovereign State.
The Italian Luca Pacioli, recognized as the father of accounting and bookkeeping was the first person to publish a work on double-entry bookkeeping, and introduced the field in Venice, Italy in 1494. He described double-entry bookkeeping, and other commerce-related concepts, in his book Particularis De Computis et Scripturis (Details of Calculation and Recording).
In Summa de Arithmetica, Pacioli introduced symbols of plus and minus, a symbols which became standard notation in Italian Renaissance mathematics also known as Algebra.
In 15th century, the Italian mathematician usually entrusted their properties to their servants or employees who were required to keep track of their daily activities by listing down what properties (assets) are owned by the merchants and what debts (liabilities) are owed to others.
From their records came the term debtor and creditor. Debtor is one who lends money or buy goods or services with a promise to pay at a future date. Creditor is one who lends money or sells services or goods to be collected in the future.
In 19th century, the massive development of trade and industry and the simple structure of a business changed to a more complex one with the formation of business combinations, mergers and consolidations.
It became necessary to improve the process of recording and reporting financial information. And with the advent of the information age driven by electronic devices such as the computer, the design for processing information turned manual to electronically assisted.
Overview
Accounting: Essential for business financial management, aiding decision-making.
Language of Business: Understanding accounting terms and rules is crucial for success.
Conscious of Business: Functions effectively with care and respect, falters with dishonesty and greed.
History
Ancient Origins: Found in Babylonia, Greece, Egypt, and Assyria as early as 2000 BC.
Egyptian Accounting: Accountants were the "eye and ear" of the king, dating back 5300 years.
Roman Influence: Records kept by families evolved into government and banking accounts.
Chanakya's Contribution: "Arthashastra" detailed accounting for a Sovereign State in Mauryan Empire.
Luca Pacioli: Father of accounting, introduced double-entry bookkeeping in Venice in 1494.
Debtor and Creditor: Terms originated from merchants' records in the 15th century.
19th Century Changes: Business complexity led to improved financial recording and reporting.
Information Age Impact: Transition from manual to electronically assisted accounting with the rise of computers.
Accounting
OVERVIEW
Accounting is the backbone of the business financial world.
Accounting provides information that helps people in business increase their chances of making decisions that will benefit their companies.
Accounting is the language of business, and like other languages, it has its own terms and rules. Understanding this language and learning to interpret it is the first step to becoming successful in an owned business and in every personal financial life as well.
Accounting is the conscious of the business world. When handled with care and with respect, it performs as expected. When abuse occurs, and the system is circumvented or overridden because of dishonesty and greed, it doesn't work correctly.
HISTORY
Accounting is considered one of the oldest profession.
Earliest Accounting was found as early as 2000 BC in the cities of Babylonia, Greece, Egypt and 3500 BC in Assyria. It consisted then of records of taxes imposed by the kings and collected from the people by their tax collectors as well as records of materials, labor, and overhead which the pharaoh required when the pyramids were being constructed in Egypt.
Babylonia was known as the city of commerce. Accounts were used for business to uncover losses due to fraud and to uncover losses due to inefficiency.
In the ancient Egypt, the accountant was called as "eye and ear" of the king. Archeologist Dr. Gunter Dreyer of the German Institute of Archeology discovered that the numerous inscribed bone labels attached to bags of oil and linen in the tomb of king scorpion, Egypt-date back 5300 years
In ancient Mesopotamia, Accounting token made of clay, from Susa - this is represented a huge cognitive leap of mankind.
In ancient Rome, government and banking accounts grew out of records keep by the heads of the families. They also used memorandum or day book (adversaria) to record receipts and payments and posted to ledgers or cash books (codex acepti et expensi) on monthly basis (700BC-400BC). By the time of the Emperor Augustus, the Roman government had access to detailed financial information.
In India, Chanakya wrote a manuscript similar to a financial management book, during the time of Mauryan Empire. His book "Arthashasthra" contains few detailed aspects of maintaining books of accounts for a Sovereign State.
The Italian Luca Pacioli, recognized as the father of accounting and bookkeeping was the first person to publish a work on double-entry bookkeeping, and introduced the field in Venice, Italy in 1494. He described double-entry bookkeeping, and other commerce-related concepts, in his book Particularis De Computis et Scripturis (Details of Calculation and Recording).
In Summa de Arithmetica, Pacioli introduced symbols of plus and minus, a symbols which became standard notation in Italian Renaissance mathematics also known as Algebra.
In 15th century, the Italian mathematician usually entrusted their properties to their servants or employees who were required to keep track of their daily activities by listing down what properties (assets) are owned by the merchants and what debts (liabilities) are owed to others.
From their records came the term debtor and creditor. Debtor is one who lends money or buy goods or services with a promise to pay at a future date. Creditor is one who lends money or sells services or goods to be collected in the future.
In 19th century, the massive development of trade and industry and the simple structure of a business changed to a more complex one with the formation of business combinations, mergers and consolidations.
It became necessary to improve the process of recording and reporting financial information. And with the advent of the information age driven by electronic devices such as the computer, the design for processing information turned manual to electronically assisted.
Overview
Accounting: Essential for business financial management, aiding decision-making.
Language of Business: Understanding accounting terms and rules is crucial for success.
Conscious of Business: Functions effectively with care and respect, falters with dishonesty and greed.
History
Ancient Origins: Found in Babylonia, Greece, Egypt, and Assyria as early as 2000 BC.
Egyptian Accounting: Accountants were the "eye and ear" of the king, dating back 5300 years.
Roman Influence: Records kept by families evolved into government and banking accounts.
Chanakya's Contribution: "Arthashastra" detailed accounting for a Sovereign State in Mauryan Empire.
Luca Pacioli: Father of accounting, introduced double-entry bookkeeping in Venice in 1494.
Debtor and Creditor: Terms originated from merchants' records in the 15th century.
19th Century Changes: Business complexity led to improved financial recording and reporting.
Information Age Impact: Transition from manual to electronically assisted accounting with the rise of computers.
