Are you an business owner or an investor or an in any way linked to the finances of a company? Then you must know the basic concepts of financial accounting. Even if you are not directly associated with the financing decisions of a company the understanding of accounting will help you analyse the condition of a company you probably want to invest in. So, even as an investor in the stock market you need to get yourself well-acquainted with the financial accounting basics. Even if you have no contact with any company or stock market knowing the concepts of financial accounting will help you manage your personal finances in a better manner.
- Financial Accounting
Financial Accounting
What is Financial Accounting?
Financial accounting basically deals with the recording and reporting of economic transactions. Accountant is a historian who keeps records of economic transactions over a period of time. In this process he respects the facts, bring into focus all known and knowable relevant facts, and also provide an interpretation of the history proposed.
History of Financial Accounting
Birth of Financial Accounting
Even in the early days of civilizations we find evidences of recording of economic transactions. A famous 15th century Pacioli (1445-1515) known as the father of modern accounting. His Summa de Arithmetica, Geometria, Proportioni et Proportionalita, is considered as the first text on accounting. Pacioli structured and organized the initial accounting system. This system was designed based on the ‘benefit and sacrifice’ principle.
Evolution of Financial Accounting
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