Accounting

An Introduction
 Definition
It is a systematic process of
identifying, recording, measuring,
classifying, verifying,
summarizing, interpreting and
communicating financial
information.
 Why we need it

Language of Business.
means of communication.
Language of Financial Decisions.
(standard)
Aspects of our lives
different roles to perform in life
 History
During 1400s, accounting grew further
because the needs for information of
merchants in the Venice City of Italy
increased. The first known description of
double entry book keeping was first
published in 1994 by Lucas Pacioli. He was
a mathematician and a friend of Leonardo
Ileda Vinci.
 Development
With the passage of time, the corporate world
grew, managers had to come up with well-
defined, structured systems of accounting to
report the performance of the business to its
owners.
it has come to be recognized as a tool for
mastering the various economic problems
which a business organization may have to
face. It systematically writes the economic
history of the organization..
 Accountant

A man who is involved in the process of

book keeping and accounting is called
an accountant.
In 1941, The American Institute of
Certified Public Accountants (AICPA)
which defines accounting as the art of
recording, classifying and summarizing
in a significant manner and in terms of
money.
 Functions

Recording
Classifying
Summarizing
Dealing with Financial Transactions
Analyzing & Interpreting
Communicating
Difference b/w Book-
keeping & accounting
 Users of Accounting
information
Owners
Management
Creditors
Employees
Investors
Government
Consumers
Research Scholars
 Objective of Accounting

To keeping systematic record

To ascertain the results of the operation
To ascertain the financial position of the
business
To portray the liquidity position
To protect business properties
To facilitate rational decision making
To satisfy the requirements of law