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| ==Origin== | | ==Origin== |
| ''Account'': Old French acunte-r, aconte-r (Provençal acontar, acomtar) < late Latin accomptā-re for *accomputā-re, < ac- = ad- to + computā-re to [[calculate]] ( < com- [[together]] + putā-re to reckon). In 14th cent. conter, in the [[original]] sense of computāre ‘count,’ began to be [[artificial]]ly respelt conpter, compter, after the [[Latin]], the natural spelling conter remaining in the sense of narrāre ‘tell’; the variant spellings passed to aconter and [[English]] account, accompt, though here with no corresponding division of meaning. The doubled -c- is part of the same refashioning | | ''Account'': Old French acunte-r, aconte-r (Provençal acontar, acomtar) < late Latin accomptā-re for *accomputā-re, < ac- = ad- to + computā-re to [[calculate]] ( < com- [[together]] + putā-re to reckon). In 14th cent. conter, in the [[original]] sense of computāre ‘count,’ began to be [[artificial]]ly respelt conpter, compter, after the [[Latin]], the natural spelling conter remaining in the sense of narrāre ‘tell’; the variant spellings passed to aconter and [[English]] account, accompt, though here with no corresponding division of meaning. The doubled -c- is part of the same refashioning |
− | *[http://en.wikipedia.org/wiki/18th_century 18th Century] | + | *[https://en.wikipedia.org/wiki/18th_century 18th Century] |
| ==Definitions== | | ==Definitions== |
| *1: the [[system]] of recording and summarizing [[business]] and [[financial]] [[transactions]] and [[analyzing]], verifying, and reporting the results; also : the [[principles]] and [[procedures]] of accounting | | *1: the [[system]] of recording and summarizing [[business]] and [[financial]] [[transactions]] and [[analyzing]], verifying, and reporting the results; also : the [[principles]] and [[procedures]] of accounting |
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| :b : an instance of applied accounting or of the settling or presenting of accounts | | :b : an instance of applied accounting or of the settling or presenting of accounts |
| ==Description== | | ==Description== |
− | '''Accounting''' is defined by the [http://en.wikipedia.org/wiki/American_Institute_of_Certified_Public_Accountants American Institute of Certified Public Accountants] (AICPA) as "the 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 [[financial]] [[character]], and [[interpreting]] the results thereof." | + | '''Accounting''' is defined by the [https://en.wikipedia.org/wiki/American_Institute_of_Certified_Public_Accountants American Institute of Certified Public Accountants] (AICPA) as "the 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 [[financial]] [[character]], and [[interpreting]] the results thereof." |
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− | Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in [http://en.wikipedia.org/wiki/Mesopotamia Mesopotamia] (Assyrians). The people of that time relied on [[primitive]] accounting [[methods]] to [[record]] the [[growth]] of crops and herds. Accounting evolved, improving over the years and advancing as [[business]] advanced. | + | Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in [https://en.wikipedia.org/wiki/Mesopotamia Mesopotamia] (Assyrians). The people of that time relied on [[primitive]] accounting [[methods]] to [[record]] the [[growth]] of crops and herds. Accounting evolved, improving over the years and advancing as [[business]] advanced. |
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− | Early accounts served mainly to [[assist]] the [[memory]] of the [http://en.wikipedia.org/wiki/Businessperson businessperson] and the [[audience]] for the account was the proprietor or [[record]] keeper alone. Cruder forms of accounting were inadequate for the [[problems]] created by a [[business]] [[entity]] involving multiple [[investors]], so [http://en.wikipedia.org/wiki/Double-entry_bookkeeping double-entry bookkeeping] first emerged in northern Italy in the 14th century, where trading ventures began to require more [[capital]] than a single [[individual]] was able to [[invest]]. The [[development]] of [http://en.wikipedia.org/wiki/Joint_stock_companies joint stock companies] created wider [[audiences]] for accounts, as investors without firsthand [[knowledge]] of their operations relied on accounts to provide the requisite [[information]]. This [[development]] resulted in a split of accounting systems for internal (i.e. [http://en.wikipedia.org/wiki/Management_accounting management accounting]) and external (i.e. [http://en.wikipedia.org/wiki/Financial_accounting financial accounting]) [[purposes]], and subsequently also in accounting and disclosure regulations and a growing need for independent attestation of external accounts by [http://en.wikipedia.org/wiki/Auditors auditors]. | + | Early accounts served mainly to [[assist]] the [[memory]] of the [https://en.wikipedia.org/wiki/Businessperson businessperson] and the [[audience]] for the account was the proprietor or [[record]] keeper alone. Cruder forms of accounting were inadequate for the [[problems]] created by a [[business]] [[entity]] involving multiple [[investors]], so [https://en.wikipedia.org/wiki/Double-entry_bookkeeping double-entry bookkeeping] first emerged in northern Italy in the 14th century, where trading ventures began to require more [[capital]] than a single [[individual]] was able to [[invest]]. The [[development]] of [https://en.wikipedia.org/wiki/Joint_stock_companies joint stock companies] created wider [[audiences]] for accounts, as investors without firsthand [[knowledge]] of their operations relied on accounts to provide the requisite [[information]]. This [[development]] resulted in a split of accounting systems for internal (i.e. [https://en.wikipedia.org/wiki/Management_accounting management accounting]) and external (i.e. [https://en.wikipedia.org/wiki/Financial_accounting financial accounting]) [[purposes]], and subsequently also in accounting and disclosure regulations and a growing need for independent attestation of external accounts by [https://en.wikipedia.org/wiki/Auditors auditors]. |
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− | Today, accounting is called "the [[language]] of [[business]]" because it is the vehicle for reporting [[financial]] [[information]] about a [[business]] [[entity]] to many [[different]] [[groups]] of people. Accounting that [[focus|concentrates]] on reporting to people inside the business entity is called [http://en.wikipedia.org/wiki/Management_accounting management accounting] and is used to provide [[information]] to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making [[management]] or operating [[decisions]]. Accounting that provides [[information]] to people outside the business entity is called [http://en.wikipedia.org/wiki/Financial_accounting financial accounting] and provides information to present and [[potential]] shareholders, [http://en.wikipedia.org/wiki/Creditors creditors] such as [[banks]] or vendors, [http://en.wikipedia.org/wiki/Financial_analysts financial analysts], economists, and [http://en.wikipedia.org/wiki/Government_agencies government agencies]. Because these users have [[different]] needs, the presentation of financial accounts is very [[structured]] and subject to many more rules than management accounting. The body of rules that governs financial accounting in a given [[jurisdiction]] is called [http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles Generally Accepted Accounting Principles], or GAAP.[http://en.wikipedia.org/wiki/Accounting] | + | Today, accounting is called "the [[language]] of [[business]]" because it is the vehicle for reporting [[financial]] [[information]] about a [[business]] [[entity]] to many [[different]] [[groups]] of people. Accounting that [[focus|concentrates]] on reporting to people inside the business entity is called [https://en.wikipedia.org/wiki/Management_accounting management accounting] and is used to provide [[information]] to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making [[management]] or operating [[decisions]]. Accounting that provides [[information]] to people outside the business entity is called [https://en.wikipedia.org/wiki/Financial_accounting financial accounting] and provides information to present and [[potential]] shareholders, [https://en.wikipedia.org/wiki/Creditors creditors] such as [[banks]] or vendors, [https://en.wikipedia.org/wiki/Financial_analysts financial analysts], economists, and [https://en.wikipedia.org/wiki/Government_agencies government agencies]. Because these users have [[different]] needs, the presentation of financial accounts is very [[structured]] and subject to many more rules than management accounting. The body of rules that governs financial accounting in a given [[jurisdiction]] is called [https://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles Generally Accepted Accounting Principles], or GAAP.[https://en.wikipedia.org/wiki/Accounting] |
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| [[Category: Economics]] | | [[Category: Economics]] |