The document is an overview of accounting, detailing its historical roots, including ancient practices and the contributions of Luca Pacioli to modern bookkeeping. It covers various aspects of accounting such as journals, trial balances, and financial statements like balance sheets and income statements, emphasizing their importance for business decision-making. Additionally, key terms related to accounting practices, including bookkeeping and auditing, are defined.

1. Boundless Lecture Slides
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2. • Defining Accounting
• Inputs to Accounting
• Outputs of Accounting
• Uses of Financial Reports
What Is Accounting?
Introduction to Accounting > What Is Accounting?
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3. • Accounting is thousands of years old; the earliest accounting records, which date
back more than 7,000 years, were found in Mesopotamia (Assyrians).
• Luca Pacioli's "Summa de Arithmetica, Geometria, Proportioni et Proportionalità"
represents the first known printed treatise on bookkeeping; and it is widely
believed to be the forerunner of modern bookkeeping practice.
• Double-entry bookkeeping is defined as any bookkeeping system in which there
was a debit and credit entry for each transaction.
Defining Accounting
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Token Accounting in Mesopotamia
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Introduction to Accounting > What Is Accounting?

4. • In accounting, a journal entry is a logging of transactions into accounting journal
items.
• The extraction of account balances is called a trial balance.
• The purpose of the trial balance is, at a preliminary stage of the financial
statement preparation process, to ensure the equality of the total debits and
credits.
Inputs to Accounting
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The Balance Sheet
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Introduction to Accounting > What Is Accounting?

5. • The balance sheet, reports on a company's assets, liabilities, and ownership
equity at a given point in time.
• The income statement is also referred to as profit and loss statement, or a "P&L."
This statement reports on a company's income, expenses, and profits over a
period of time.
• A statement of changes in shareholder's equity explains the changes of the
company's equity throughout the reporting period.
Outputs of Accounting
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A Sample Income Statement
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Introduction to Accounting > What Is Accounting?

6. • Owners and managers require financial statements to make important business
decisions that affect its continued operations.
• Employees also need these reports in making collective bargaining agreements
with the management, in the case of labor unions or for individuals in discussing
their compensation, promotion, and rankings.
• Although laws differ from country to country, an audit of the financial statements
of a public company is usually required for investment, financing, and tax
purposes.
Uses of Financial Reports
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Auditing Firm
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Introduction to Accounting > What Is Accounting?

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Appendix

8. Key terms
• auditor A person who audits (reviews and examines) bookkeeping accounts
• bookkeeper A person responsible for keeping records or documents, such as of a business.
• bookkeeping The skill or practice of keeping books or systematic records of financial transactions, e.g., income and expenses.
• creditworthiness The property of being creditworthy, when a person is deemed likely to repay debts and / or has an acceptable
credit rating
• debenture A certificate that certifies an amount of money owed to someone; a certificate of indebtedness.
• journal a book or computer file in which monetary transactions are entered the first time they are processed
• journal entry A journal entry, in accounting, is a logging of transactions into accounting journal items.The journal entry can
consist of several items, each of which is either a debit or a credit.The total of the debits must equal the total of the credits or
the journal entry is said to be "unbalanced." Journal entries can record unique items or recurring items, such as depreciation or
bond amortization.
• ledger A collection of accounting entries consisting of credits and debits.
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Introduction to Accounting

9. A Sample Income Statement
Expenses are listed on a company's income statement.
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10. Journals to Ledgers
The general ledger works as a central repository for accounting data transferred from all sub-ledgers or modules like accounts payable, accounts
receivable, cash management, fixed assets, purchasing, and projects.
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11. Bookkeeping
Bookkeeping is the recording of financial transactions, includng sales, purchases, income, receipts and payments by an individual or organization.
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12. Auditing Firm
Auditing firm office building in San Francisco.
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Introduction to Accounting

13. Token Accounting in Mesopotamia
The invention of a form of bookkeeping using clay tokens represented a huge cognitive leap for mankind.
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14. Father of Double-Entry Accounting
Portrait of Luca Pacioli, attributed to Jacopo de' Barbari, 1495 (Museo di Capodimonte).
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Introduction to Accounting
Accounting, bookkeeping and auditing represent:
A) the three fields of accounting
B) the three divisions of accountancy
C) the three accounting practices
D) the three major branches of accounting

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Introduction to Accounting
Accounting, bookkeeping and auditing represent:
A) the three fields of accounting
B) the three divisions of accountancy
C) the three accounting practices
D) the three major branches of accounting