ZAMBEZE UNIVERSITY

FACULTY OF SOCIAL SCIENCES AND HUMANITIES–BEIRA

ACCOUNTING AND FINANCE
1ºNIVEL

Group's name: G1CFLAB2021

Inglês Técnico

Theme: ACCOUNTING AND FINANCE VOCABULARY AND FUNDAMENTALS

Students: Student code

FadelinoTacania……..……………….……………………..…………………211012151021

Menia Patrício Jarabe…………………………………………………………..211012151010

Cheque Ramudala Cheque…………………………………………………...…211012151011

Shaquila Abdul Cassamo……………….………………………………………211012151011

Teacher: Mr.Joaquim Coimbra

Beira, 15 de November de 2021

INDEX
INTRODUCTION...........................................................................................................................3
Accounting and Finance..................................................................................................................4
Definition.....................................................................................................................................4
Objective......................................................................................................................................4
The Importance of Accounting and Finance................................................................................4
Advantages of Financial Accounting...........................................................................................5
Disadvantages of Financial Accounting......................................................................................5
Father of Accounting...................................................................................................................6
Accounting history.......................................................................................................................7
The evolution of accounting........................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
 ACCOUNTING AND FINANCE VOCABULARY AND FUNDAMENTALS

1. INTRODUCTION

The aim of this work is to describe the history of accounting, thus mentioning the importance,
objective, advantages and disadvantages, and the evolution of accounting and finance.

The evolution of man and society as a whole is mainly the result of studies, research, discoveries
and revolutions. Accounting is no different, as it is present both in personal life and in business
affairs and, in this sense; it is configured as a science of vital importance for the development of
society. With this, we want to efficiently understand the importance of accounting in man's life.

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2. Accounting and Finance

2.1 Definition

Financial Accounting is the field of accounting related to summarizing, analyzing and reporting
financial transactions relating to a business.

It is a science that monitors changes in equity, since the formation of the company, and that can
be used to monitor the financial health of the business. With this, accounting works from the
collection and processing of financial information, while accounting focuses on information
about the company's transactions and assets, finance controls the money that enters and leaves
the box on a day-to-day basis and does projections to predict the future situation.

2.2 Objective

Accounting is, therefore, a science whose objective is to assist entities in decision making,
through useful and accurate information.

It is observed that accounting is an information system that controls the assets of entities
belonging to individuals or legal entities, and, in order to achieve success, there is a need for a
more effective and efficient control before the entity.

2.3 The Importance of Accounting and Finance

Accounting is a science that has achieved relevance throughout its evolution, given its nature of
providing information to users. Accounting is an applied social science, as it is from human
action that changes are generated in the patrimonial phenomenon, however accounting uses
mathematics and statistics as its main tools. (IUDÍCIBUS, MARION and FARIA, 2009).

History shows that Accounting was becoming more and more important, according to economic
development, due to society's needs to gain control over its assets.

According to Iudícibus and Marion (2011, p.1): “Accounting is the great instrument that helps
the administration to make decisions. In fact, it collects all economic data, measuring them
monetarily, recording and summarizing them in the form of reports or communications, which
greatly contribute to decision-making.”

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It appears that accounting is necessary in the administration area, as its reports help managers in
decision-making and, at the end of periods, the verification of profits or a possible loss of
evidence.

2.4 Advantages of Financial Accounting

Financial accounting brings several benefits to our company, as it firstly gives us a perspective
of the economic magnitudes of our company, through which it is responsible for giving a
historical record of our economy. It helps to raise a notion of accounting facts, shows in a
summarized way the main financing, marketing and productivity processes.

Among the many advantages that this branch of accounting brings us, we will cite and explain
some of its most important benefits, such as tax advice collaborates with management for
decision-making, reveals the financial situation and maintains the company's accounts.

Discloses financial situation: on a daily basis, the financial accounting communicates the
current status of the economic aspect. Thanks to this report, the management part of the
organization is kept informed about the financial situation. This information is used as a
tool for decision making, checking whether the proposed objectives were achieved or not.
Provide assistance in relation to taxes: contributes to the fulfillment of taxes that must be
presented to the tax authorities and reflected in the financial statements so that there is no
inconvenience, thus avoiding legal problems for the company.
Keeps the company's accounting: it documents the transaction carried out by the
company in its entirety. Maintain more developed accounting with an adequate
accounting system.
Collaborate with management for decision-making: whoever manages the company uses
the data provided by financial accounting, generating their decisions based on the results
they are presenting and with the help of an accountant.

2.5 Disadvantages of Financial Accounting

Like financial accounting, it has the advantage of economically collating, recording and
analyzing a company's information. It has disadvantages, which are already for reasons of giving
past information, only studying one aspect of the equation or, because it is incorrectly applied,

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breaking rules and principles of ethics, when modifying data. Some disadvantages of financial
accounting:

Information that is previous data: refers to the fact that financial accounting provides old
data as, depending on the company, this data is presented quarterly, annually or semi-
annually. The information we have is not up to date. Not so it's useless, but it's not
current.
It only records the financial aspect: it only takes care of the monetary aspects, leaving
out other factors that can help the company, such as market competition and other matters
that can influence the optimization of the company's productivity.
Can be manipulated: numbers can be changed at the company's convenience.

2.6 Father of Accounting

Luca Bartolomeo de Pacioli, born in 1445, was a Franciscan monk and celebrated Italian
mathematician. He is considered the father of modern accounting. On November 10, 1494, it
was described by him for the first time in the book “Summa de Arithmetica, Geometria,
Proportioni et Proportionalità” (Knowledge of Arithmetic, Geometry, Proportion and
Proportionality), in the chapter “Tratactus de Computis et Scripturis” (Double-Entry
Accounting), the famous Double-Entry Method.

He emphasizes that the accounting theory of debt and credit corresponds to the theory of
positive and negative numbers. This method had rapid diffusion, being universally accepted and
adopted since that time.

The method is that, in each entry, the total amount posted to debit accounts must always be
equal to the total amount posted to credit accounts, that is, there is no debtor without a
corresponding creditor. Every debit corresponds to a credit of equal value and vice versa. If it
increases on one side, it must consequently increase on the other as well. This work served to
systematize and popularize accounting, marking the beginning of the modern phase of
accounting. In accounting today, this method continues to be used at full throttle!

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2.7 Accounting history

The history of accounting is as old as the history of civilization itself. It is linked to the first
human manifestations of the social need to protect possession and to perpetuate and interpret the
facts that occurred with the material object that man has always had to achieve the proposed
ends.

Accounting emerged at the beginning of civilization, with man's need to control and store his
goods; it was born, then, with the purpose of a more rigid control of these goods. There are
historians who claim that accounting appeared 2,000 years ago BC.

The first examples of accounting were found in Sumer and Babylon, which is now named Iraq,
also in Egypt and China. Accounting originated from records in businesses, in which merchants
exchanged their products and, in a simple way, wrote down their obligations, their rights and the
goods of third parties. The evolution of Accounting was slow until the emergence of currency.
(IUDÍCIBUS, 2010).

The origin of Accounting is linked to the need for trade records. There are indications that the
first commercial cities were of the Phoenicians. The practice of commerce was not exclusive to
these, being carried out in the main cities of Antiquity.

As economic operations become complex, their control refines. The government writings of the
Roman Republic (200 BC) already brought cash receipts classified into income and profits, and
expenses included in the items wages, losses and entertainment.

We can summarize the evolution of accounting science as follows:

ANCIENT WORLD ACCOUNTING – period that begins with the first civilizations
and goes until 1202 of the Christian Era, when the Liber Abaci, by Leonardo Fibonaci,
the Pisano, appeared. The first records were processed in a rudimentary way, in the
memory of man. As this is a thinking, intelligent being, he soon found more efficient
ways to process his records, using recordings and other alternative methods. Although
rudimentary, the registration, in its form, resembled what is currently processed. The
name of the account, “Matrixes”, for example, replaced the engraved figure, while the
numerical aspect became more qualified, with the addition of the monetary value to the

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quantitative one. This evolution allowed that, parallel to the “Application”, it could also
be demonstrated its “Origin”.

In the city of Ur, in Chaldea, where Abraham, a biblical character mentioned in the book of
Genesis, lived, important accounting documents can be found in excavations: a cuneiform table,
where accounts referring to labor and materials are registered, or that is, Direct Costs. This
means that, 5,000 years before Christ, man already considered it essential to calculate its costs.

The Accounting System is dynamic and evolved with the duplication of documents and “Seals
of Secrecy”. Records became diaries and were later synthesized on papyrus or tablets at the end
of certain periods. They underwent a new synthesis, grouping several periods, which resemble
the diary, the monthly balance sheet and the annual balance sheet.

MEDIEVAL WORLD ACCOUNTING – period from 1202 of the Christian Era to

1494, when the Tratactus de Computis et Scripturis (Accounting by Double Entry) by Fra
Luca Paciolo, published in 1494, emphasizing that the accounting theory of debt and
credit corresponds to the theory of positive and negative numbers, a work that contributed
to insert accounting among the branches of human knowledge. It was an important
period in the history of the world, especially in the history of Accounting, called the
"Technical Era", due to the great inventions, such as the windmill, improvement of the
compass, etc., which opened new horizons for navigators, such as Marco Pólo and others.

ACCOUNTING IN THE MODERN WORLD – period from 1494 to 1840, with the
appearance of the work “La Contabilità Applicatta alle Amministrazioni Private e
Pubbliche”, by Franscesco Villa, awarded by the Austrian government. A remarkable
work in the history of Accounting. It was the pre-science phase, during this period there
were three important events:

 In 1453, the Turks take Constantinople, which caused great Byzantine sages to emigrate,
mainly to Italy;

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 In 1492, America was discovered and, in 1500, Brazil, which represented an enormous
potential of wealth for some European countries;
 In 1517, the religious reform took place; Protestants, persecuted in Europe, immigrated
to the Americas, where they settled and started a new life.

Accounting became a necessity to establish control of the countless riches that the New World
represented.

2.8 The evolution of accounting

First, accounting was primarily concerned with financial information, aiming to meet tax and
legal obligations.

With technological evolution and the expansion of social needs, as a whole, there was also an
expansion of the range of potential accounting users, creating the need for the company to show
its achievements to society, contrary to what happened in the past, when accounting its objective
was to inform the owner only of the profit obtained by the company in a given period.

With the emergence of the globalized market that intensified competition, accounting
information became essential and strategic for subsistence and for the creation of competitive
advantage to enable local companies to compete with large transnational corporations, and for
them to have the necessary information to be able to advance and expand worldwide.

It should be noted that accounting has evolved and acquired specific laws, thus taking control of
current situations, gaining ground in the labor market and making science in relation to economic
and financial control.

Since then, accounting has taken its place in the world, following the growth and development
of society and adapting itself according to the needs of civilization. If before there was no way
to live without accounting, today, with the rapid evolution, the accounting tool is extremely
necessary.

A view on the future of accounting and finance

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In this new phase of Accounting, companies and accounting offices used technology and
automation in favor of work, saving time to consult and bring business differentials, that is, new
digital resources replace functions that were previously manual, facilitating the work of the
counter.

Since functions previously performed by professionals trained in the Accounting course are now
performed by software and computers, there is a change in the behavior of the accountant in the
labor market. Accounting firms or offices.

In this new moment in Accounting, new skills will be required from professionals in the area.
Accountants will have an increasingly strategic and less bureaucratic role in institutions.

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3. CONCLUSION

It is concluded that accounting is a tool of fundamental importance for the daily life of society,
as it, increasingly, assumes greater relevance in the business context, as it helps local finance,
with the objective of control and success in the taking of decisions.

Through this study it was found that the origin of accounting is as old as primitive man, and its
evolution is directly related to the economic progress of society.

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4. REFERENCES

GONÇALVES, Eugênio Celso, BAPTISTA, Antônio Eustáquio. General contability.

São Paulo, Atlas, 2011.

IUDÍCIBUS, Sérgio de, MARTINS, Eliseu, CARVALHO, L. Nelson. Accounting

Evolution. São Paulo, Atlas, 2005.

PADOVEZE, Clóvis Luís. Basic Accounting Manual: Introductory and Intermediate

Accounting. São Paulo, Atlas, 2012.

REIS, Aline de Jesus, SILVA, Selma Leal da. The history of accounting. 2008.

SCHMIDT, Paulo: History of Accounting Thought. Porto Alegre: Bookman, 2000.

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