Accounting is defined as the art of recording, classifying, and summarizing financial transactions to aid decision-making. It serves as a critical information system for businesses, facilitating the management and investment decisions through detailed reporting on financial performance and position. The document traces the evolution of accounting from early developments in Mesopotamia to modern practices, highlighting key contributors like Luca Pacioli and the formalization of the profession in the 19th century.

1. INTRODUCTION TO ACCOUNTING
LESSON 1

2. “Accounting as an Art”
Accounting is 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 a financial
character and interpreting the results thereof (American Institute
of Certified Public Accountants- AICPA).

3. Accounting
It is a service activity, its function is to provide quantitative
information, primarily financial in nature, about economic
entities, that is intended to be useful in making economic
decisions (Accounting Standards Council- ASC).
Accounting is the process of identifying, measuring and
communicating economic information to permit informed
judgment and decision by users of financial information
(American Accounting Association- AAA)

4. NATURE OF ACCOUNTING
> Accounting is a process
> Accounting is an art
> Accounting is concerned with financial information and transactions
> Accounting is means not than and end
> Accounting is an information system

5. FUNCTION OF ACCOUNTING IN BUSINESS
The purpose of accounting is to accumulate and report on financial
information about the performance, financial position, and cash flows
of a business. This information is then used to reach decisions about
how to manage the business, or invest in it, or lend money to it. This
information is accumulated in accounting records with accounting
transactions, which are recorded either through such standardized
business transactions as customer invoicing or supplier invoices, or
through more specialized transactions, known as journal entries.

6. HISTORY OF ACCOUNTING
• The early development of accounting was closely related to
developments in writing, counting, and money. In particular, there
is evidence that a key step in the development of counting the
transition from concrete to abstract counting was related to the
early development of accounting and money and took place in
Mesopotamia.
• In India Chanakya wrote a manuscript similar to a financial
management book, during the period of the Mauryan Empire. His
book "Arthashasthra" contains few detailed aspects of maintaining
books of accounts for a Sovereign State.

7. • The Italian Luca Pacioli, recognized as The Father of
accounting and bookkeeping was the first person to publish a
work on double-entry bookkeeping, and introduced the field in
Italy.
• The modern profession of the chartered accountant originated in
Scotland in the nineteenth century. Accountants often belonged to
the same associations as solicitors, who often offered accounting
services to their clients. Early modern accounting had similarities to
today's forensic accounting. Accounting began to transition into an
organized profession in the nineteenth century, with local
professional bodies in England merging to form the Institute of
Chartered Accountants in England and Wales in 1880.