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Accounting PDF

The document provides an overview of the evolution and definition of accounting, highlighting its role as a language of business and a means of communication. It traces the development of accounting practices from simple methods until the establishment of the double-entry system in 1494 by Luca Pacioli, which became essential for safeguarding shareholder interests. Additionally, it defines accounting as the process of collecting, recording, summarizing, and communicating financial information.

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5 views7 pages

Accounting PDF

The document provides an overview of the evolution and definition of accounting, highlighting its role as a language of business and a means of communication. It traces the development of accounting practices from simple methods until the establishment of the double-entry system in 1494 by Luca Pacioli, which became essential for safeguarding shareholder interests. Additionally, it defines accounting as the process of collecting, recording, summarizing, and communicating financial information.

Uploaded by

Navpad Classes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT I

Accounting:
An Overview
1. Evolution of Accounting
Accounting…
- is a language of business
- serves as a means of communication
- is as old as civilization and
- is as old as use of money
1. Evolution of Accounting
Till 13th century, the
mode of keeping
account was simple.

Current accounting
system was developed
in 1494, by Luca Pacioli
1. Evolution of Accounting
Industrial Revolution

Ownership was separated Formation of Joint


from management stock Companies

The idea of financial accounting


based on the “DOUBLE ENTRY”
principle came to be recognized
1. Evolution of Accounting
Double Entry System

The shareholders’ and The need was statutorily


others’ interest were to recognized
be safeguarded
Emerged as an information
system for investors

In the form of statements


such as P&L A/c & B/S
2. Definition of Accounting
Accounting refers to the process of…

-Collecting,
-Recording,
-Summarizingand
-Communicating

Financial information.
2. Definition of Accounting
According to the American Institute of
“Certified Public Accountants” (AICPA)

Accounting is
“an art of recording, classifying and
summarizing 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.”

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