ACCOUNTING-bridge of communication between business and its owners.

1. DEFINITION OF ACCOUNTING
 measures business activities, processes that information into reports & communicates the
results to decision-makers
 needed by businesses as the owners and management of the business needs to know about the
business earnings and spending thus, accounting will provide this to them
 language of business

Accounting Standards Council (1983)

 is a service activity
 provide quantitative information primarily financial in nature, about economic entities that is
intended to be useful in making economic decisions

American Accounting Association (1966)

 process of identifying, measuring and communicating economic information to permit informed

judgments and decisions by the users of the information

Financial Accounting Standards Board (1978)

 an information system that measures, processes and communicates financial information about
an economic entity

American Institute of Certified Public Accountants (1953)

 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

2. EVOLUTION OF ACCOUNTING

Accounting History

 important to accounting pedagogy, policy and practice and works on the effect of the evolution
to the environment
 understand better the past, the present and the possible future of accounting
 study of how accounting thoughts, practices and institutions evolves to respond the changes in
the environment and societal needs

The Primitive Accounting

 The origin of keeping accounts is evidenced by clay tokens, cones, disks, spheres and pellets in
8500 B.C. in Mesopotamia(Iraq)
 Bullae is the tokens used to deliver products, this are clay balls that are broken on delivery and
this are called as the first known bill of lading
 Wet clay tablets replaces the bullae as this is the origin of record keeping using the art of
writing. These re also used by Babylonia(3,600 B.C.) in recording payments of wages to keep
track of the costs of labor and materials in building structures (e.g. Great Pyramids of Egypt)
 Scribe on a small mound of clay is used by Babylonia(2286-2242 B.C.) where the signatures of
the parties affixed in the mound of clay and allow them to dry. It contains the record about the
agreed-price of the transaction, this is a sealed memorandum given by the seller to the buyer as
required by the law based on the Code of Hammurabi, before the transaction become
enforceable.
 The tablets are used in collections of writing about how many bushels of grain in the
warehouse and who brought them and how much taken to the king as his share. Thus, tax
collecting activity is linked to accounting in ancient times