02-05-2012, 11:28 AM
HISTORY OF ACCOUNTING
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HISTORY OF ACCOUNTING
The history of accounting is as old as civilization, among the most important professions in economics and business, Accountants participated in the development of cities, trade, and the concepts of wealth and numbers.
Accountants invented writing, participated in the development of money and banking, invented double entry bookkeeping that fueled the Italian Renaissance.
The role of accountants in the ancient world is coming into clearer focus with new archaeological discoveries and innovative interpretations of the artifacts.
Maintaining proper records of business transactions.
one of the important objectives of accounting is to maintain complete proper and systematic record of all the business transactions of the business so that the financial information required on any matter can be had readily and easily .
Ascertaining the profit or loss of the business
It is to ascertain the profit or loss of the business for an accounting period by preparing the profit or loss account
Knowing the sources of revenue and the items of expenses
To know how the profit is earned or the loss is incurred that is to know the various sources of revenue and the various items of expenses which have resulted in profit or loss.
Recording
This is the basic of function of accounting. It is essentially concerned without only ensuring that all business transactions of financial character are in fact recorded but also that they are recorded in an orderly manner . Recording is done in the book
‘ journal’ . This book may be further sub divided into various subsidiary books such as cash journal,purchases journal,sales journal.the number of subsidiary books to be maintained will be according the nature and size of business.