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AMERICANOS COLLEGE

ASSINGMENT OFFINANCIAL ACCOUNTINGSTUDENT NAME:BHASKAR CHAKRABORTYCOURSE CODE:ACC101CSEMESTER:SPRING 2009

STUDENT ID:20083782

Introduction

It is not easy to provide a concise definition of accounting since theword has a broad application within businesses and applications.

What Is Accounting

Accounting is a body of principles and conventions aswell as an established general process for capturing financial information related to anentity's resources and their use in meeting the entity's goals. Accounting is a servicefunction that provides information of value to all operating units and to other servicefunctions, such as the headquarters offices of a large corporation. This definition is agood place to start. Let's look at the key words in the above definition:- It suggests that accounting is about providing to others. Accounting information is

economic information

- it relates to the financial or economic activities of the businessor organization.- Accounting information needs to be

identified and measured

. This is done by way of a"

set of accounts"

, based on a system of accounting known as

double-entrybookkeeping

. The accounting system identifies and records "

accounting transactions"

.- The

"measurement"

of accounting information is not a straight-forward process. itinvolves making judgements about the value of

assets

owned by a business or

liabilities

owed by a business. it is also about accurately measuring how much profit or loss has been made by a business in a particular period. As we will see, the measurement of accounting information often requires

subjective judgement

to come to a conclusion- The definition identifies the need for accounting information to be

communicated

. Theway in which this communication is achieved may vary. There are several forms of accounting communication (e.g. annual report and accounts, management accountingreports) each of which serve a slightly different purpose. The communication need isabout understanding

who

needs the accounting information, and

what

they need toknow!

Accounting is a field of specialization critical to the functioning of all types of organizations. Accounting often is referred to as "the language of business" because of itsrole in maintaining and processing all relevant financial information that an entityrequires for its managing and reporting purposes.Accountants often have a specific subspecialization and function at one of several levels.Preparation for the field is provided by secondary schools, postsecondary businessschools, community colleges, and four-year colleges and universities.

Origin of Accounting

Modern accounting is traced to the work of an Italianmonk, Luca Pacioli, whose publication in A.D. 1494 described the double-entry system,which continues to be the fundamental structure for contemporary accounting systems inall types of entities. When double-entry accounting is used, the balance sheet identifies both the resources controlled by the entity and those parties who have claims to thoseassets.Early histories of business identify the bookkeeper as a valuable staff member. As businesses became more complex, the need for more astute review and interpretation of financial information was met with the development of a new profession—publicaccounting. In the United States, public accounting began in the latter part of thenineteenth century. The first organization was established in 1887; the first professionalexamination was administered in December 1896.In the early days of the twentieth century, numerous states established licensingrequirements and began to administer examinations. During the first century of publicaccounting in the United States, the American Institute of Certified Public Accountants(and its predecessor organizations) provided strong leadership to meet the changing needsof business, not-for-profit, and governmental entities.