Financial Accounting
BBA 1st Sem & BCA 2nd Sem
Chapter .-1 Introduction of accounting
A brief history of Accounting : -The evolution of accounting is as old as civilisation. The seeds of accounting were most likely first sown in babylonia and egypt around 4000 b.c . who recorded transactions of payment of wages and taxes on clay tablets .
Even in india , the use of accounting could be traced to ancient times. In the book ‘Arthashastra , written by kautilya the ministry of the king chandra gupt maurya around 4th century b.c.
The first publication on modern accounting system , viz, the double entry system , came out in venice in 1494 . In that year , Luca De Bargo Pacioli ,
Meaning of Accounting & purpose :-As per American Institute of Certified Public Accountants (AICPA) (Year 1961)
“Accounting is the art of recording, classifying and summarizing the economic information in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof,,.
Definition of Accounting :- According to R. N. Anthony : -“Nearly every business enterprise has accounting system . It is a means of collecting , summarising , analysing , and reporting in monetary terms information about business .,,
A BRIEF HISTORY OF BOOKKEEPING:-- The Franciscan of Lucas Pacioli is called the father of bookkeeping In 1494, he published a book 'De Computisset Sculpturist' in the city of Venice, Italy, which was considered a book in relation to bookkeeping
MEANING AND PURPOSE OF BOOKKEEPING: -Bookkeeping deals with the recording of data regarding business activities in an important and systematic way-
I. Book-keeping is an activity concerned with the recording of financial data relating to the business operations in orderly manner.
II. Book keeping is the recording phase whereas accounting is concerned with summarising phase of an accounting system.
III. Book-keeping provides base for accounting.
IV. Book-keeping provides necessary data for accounting and accounting starts where bookkeeping ends.
IMPORTANT DEFINITIONS: -According to B.G Bikari: -Book-keeping is the foundation upon which the structure of the current business is laid.
ACCORDING TO SPICER AND PEGLER: -Bookkeeping is the art of writing business and other hands as currency
IMPORTANT PURPOSE: - To help in finding the profit and loss of business and to find out the economic situation in a given period of time.
Complete recording of transactions
