Basic Understanding about Financial Accounting - Its History, dual accounting system, previous incompleted system, golden rules etc

2. Through PowerPoint Presentation
Presented By
Anand Jenifer Rosario J

3. In early ages commercial activities were based on barter
system, therefore record keeping was not a necessitized.
Since the money found as a common medium of exchange
of all commodities, there might be a need for Accounting

4. Accounting is as old as money itself. Early references to
accounting concepts are found in the Vedas. ‘Vikrava’ and
‘Nirukta’ denoting ‘Sale’
Sulka in the Rig Veda clearly means ‘Price’. In Dharma
Sutras it denotes a ‘tax’
The earliest accounting records were found amongst the
ruins of ancient babylon, Assyria and Sumeria, which
date back more than 7000 years
People of that time relied on primitive accounting
methods to record the growth of crops and herds

5. In India, 23 Centuries ago, Chandragupta Maurya’s
Minister Kautilya wrote a book named ‘Arthashastra’,
wherein some references can be traced regarding the
way of maintaining ‘ACCOUNTING RECORDS’

6. In earliest days of civilisation, accounting was done by
stewards who managed the properties of wealthy people.
They rendered accounts periodically to the owners of
property .
The stewardship accounting is said to be the root of
accounting.
Records of debit and credit were found in the 12th century
itself

11. In 1494, Luca Pacioli , an Italian developed
double-entry-book keeping system.
Luca Pacioli is called as “ Father of
Accounting”
Though he found this system in 14th century, it came into
practice during 18th and 19th centuries, due to the
industrial revolution
Large Scale operations were carried on and Joint Stock
Companies emerged as an important form of organisation
which required separation of ownership from
management.
Therefore, in order to safeguard the interest of investors,
the business establishments required detailed
information about business which paved the way for the
development of comprehensive Financial Accounting
System.

12. Definition:
According to American Institute of Certified Public
Accountants,
“ Accountings is the art of recording, classifying and
summarising in a significant manner and in terms of
money, transactions and the events which are in part, atl
east of financial character and interpreting the results
thereof”

20. An accounting transaction is a business event having a
monetary impact on the financial statements of a
business. It is recorded in the accounting records of the
business.
Examples of accounting transactions are:
Sale in cash to a customer
Sale on credit to a customer
Receive cash in payment of an invoice owed by a
customer
Purchase fixed assets from a supplier
Record the depreciation of a fixed asset over time
What is an Accounting Transaction?