Accounting is an art of recording, classifying and summarizing transactions and events and interpreting the results thereof.
The social and economic needs of society change with time. Just like other subjects such as law, medicine, engineering and science, accounting has also emerged to assist the social and economic activities of the society. From ancient times, accounting system has prevailed in one way or another. Indian historians have described the economics of Chanakya and explained the existence and significance of accounting. Western historians have given credit to a mathematician named Mr. Luca Pacioli of Italy. There are several opinions about the origin of accounting but for its use and significance, common practices prevail across the world. Due to industrial revolution and expansion of business - trade activities, the use and significance of accounting has increased day by day. Before acquiring information of accounting, let us acquire primary knowledge of accounting.
In this chapter:
+ Characteristics and Objectives of Accounting
+ Advantages and Limitations of Accounting
+ Users of accounting and their needs
+ Terminology of Accounting
+ Types of accounting
+ Steps to prepare Accounts