Page 17 - Accounting Principles (A Business Perspective)

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Patricia H. Holmes (Des Moines Area Community College, USA)
Donald W. Johnson, Sr. (Siena College, USA)
Linda Lessing (SUNY at Farmingdale, USA)

Cheryl E. Mitchem (Coordinator) (Virginia State University, USA)
Lee H. Nicholas (University of Northern Iowa, USA)
Lynn Mazzola Paluska (Nassau Community College, USA)
Benjamin Shlaes (Des Moines Area Community College, USA)
Margaret Skinner (SUNY at New Paltz, USA)
Leonard F. Stokes III (Siena College, USA)
Kathy J. Tam (Tulsa Junior College, USA)

Other Contributors
Donald R. Herrmann (Baylor University, USA)
Keith F. Sellers (Fort Lewis College, USA)
Wayne B. Thomas (University of Oklahoma, USA)
T. Sterling Wetzel (Oklahoma State University-Stillwater, USA)
Former co-author

R. F. Salmonson (Deceased) (Michigan State University, USA)
The accounting environment

Learning objectives
After studying this introduction, you should be able to:
• Define accounting.
• Describe the functions performed by accountants.
• Describe employment opportunities in accounting.
• Differentiate between financial and managerial accounting.

• Identify several organizations that have a role in the development of financial accounting standards.
You have embarked on the challenging and rewarding study of accounting—an old and time-honored discipline.
History indicates that all developed societies require certain accounting records. Record-keeping in an accounting
sense is thought to have begun about 4000 BCE
The record-keeping, control, and verification problems of the ancient world had many characteristics similar to
those we encounter today. For example, ancient governments also kept records of receipts and disbursements and
used procedures to check on the honesty and reliability of employees.

A study of the evolution of accounting suggests that accounting processes have developed primarily in response
to business needs. Also, economic progress has affected the development of accounting processes. History shows
that the higher the level of civilization, the more elaborate the accounting methods.
The emergence of double-entry bookkeeping was a crucial event in accounting history. In 1494, a Franciscan
monk, Luca Pacioli, described the double-entry Method of Venice system in his text called Summa de Arithmetica,
Geometric, Proportion et Proportionate (Everything about arithmetic, geometry, and proportion). Many consider
Pacioli's Summa to be a reworked version of a manuscript that circulated among teachers and pupils of the
Venetian school of commerce and arithmetic.

Accounting Principles: A Business Perspective 18 A Global Text