This document provides an overview of book keeping, financial accounting, and the history of accounting. It defines accounting and book keeping, outlines their key phases and processes. It discusses the origins of accounting in ancient civilizations and the development of double-entry bookkeeping. It also summarizes the historical development of accounting and the accounting profession in Nigeria, including the establishment of early accounting organizations and institutions in the country.

1. Book Keeping & Financial Accounting
Dr. Zaharaddeen Abdullahi
Abdullahizaharaddeen@gmail.com
Being a Lecture Notes for ACC1315 Introduction to Accounting &
Financial Reporting-1&2
ACC1317 Principles of Accounting – 1 &2
ECO1315 Introduction to Accounting
ACC1319 Principles of Accounting
FALL 2022 SEMESTER
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2. Outline of Presentation
Nature and Purpose of Accounting
Definition of Accounting and Book Keeping
History of Accounting
Roles of Accounting
Branches of Accounting
Qualities of Accounting Information
Users of Accounting Information
Concepts & Conventions
Accounting Methods
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3. NATURE AND PURPOSE OF ACCOUNTING
Definition of Accounting
The American Institute of Certified Public Accountants (AIPCA,
1961) defines accounting 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 a
financial character, and interpreting the result thereof”.
Igben (2009) defines accounting as “the process of collecting,
recording, presenting and analyzing/interpreting financial
information for the users of financial statements”.
The American Accounting Association-AAA- in 1966 defined
accounting as “the process of identifying, measuring and
communicating economic information to permit informed
judgments and decisions by the users of the information”.
AAA’s definition enjoys greater acceptability among
accounting scholars.
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4. NATURE AND PURPOSE OF ACCOUNTING
From all the above given definitions, three
key phases can be identified:
•Data Collection Phase: This phase has to do with
obtaining details of financial transactions from source documents (invoices,
receipts, payment vouchers etc.) as they occur.
•Recording Phase: Here, the accountant will classify and
summarize transactions into meaningful groups and record them in relevant
books of accounts (journals, cash books and ledgers).
•Interpretation Phase: Finally, the transactions will be
presented and communicated as information to those who need them. In
doing this, the accountant will analyze and interpret the information in a
manner that will make it comprehensible for the users of the information,
who in turn, can take appropriate decisions.
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5. NATURE AND PURPOSE OF ACCOUNTING
Definition of Book-Keeping
Meigs, Meigs, Bettner and Whittington (1996) see
book-keeping as the clerical side of accounting, as it
has to do with recording of routine transactions and
day to day record keeping.
Wood and Sangster (2009) define book-keeping as the
process of recording data relating to an accounting
transactions in the accounting books.
 The Association of Accountancy Bodies in West Africa
(ABWA, 2009) also see book-keeping as the
recording phase of accounting, as it involves the
classification and recording of business transactions in
the books of accounts.
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6. NATURE AND PURPOSE OF ACCOUNTING
Definition of Book-Keeping
The major processes involved in book-keeping
are:
The classification of business transactions using
source documents.
Recording of classified transactions in appropriate
subsidiary books or books of prime entry.
Posting of entries from subsidiary books to the
ledger.
Extraction of the trial balance.
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7. NATURE AND PURPOSE OF ACCOUNTING
Origin of Book Keeping and Accounting
Book-keeping and accounting started long time ago, though the
exact date is not known, there is evidence to suggest that they
originated right from the time people started having financial
dealings among one another.
Financial records keeping is thought to have begun in about
4000 B.C. in the ancient kingdoms of Babylonia, Summeria
and Assyria.
Clay tablets were used in the Babylonian Empire to record
various facts. Many of these records contained lists of events as
they occurred or lists of goods belonging to an individual or estate.
Similar types of records have also been found describing
business activities in ancient Greece, Egypt, and Rome.
All these early records contained mostly lists of inventories of
goods and debts, later records began to reflect a concern for
computing profit and loss from the ventures. 7

8. NATURE AND PURPOSE OF ACCOUNTING
Origin of Book Keeping and Accounting
 The crucial event in accounting history was the introduction of “Double
Entry Book-Keeping” during the 15th century, which began during the 13th
and 14th centuries in several trading centres in Northern Italy.
 Luca Pacioli published a book entitled “Summa de Arithmetica,
Geometrica, Proportioni et Proportionalita” (i.e. Everything about
Arithmetic, Geometry, Proportions and Proportionalities) in Venice in 1494.
 Though the book is essentially on mathematics, it included a section on
double entry book-keeping called “particularis de computis et scriptures”
(i.e. details of accounting and recording).
 Pacioli opined that every accounting transaction involves two things:
gaining and losing of value.
 Like an algebraic expression (which is solved by performing the same
operation on both sides of the equality sign, accounting transaction is solve
by debiting one account (the receiver of value) and crediting another
account (the giver of value).
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9. NATURE AND PURPOSE OF ACCOUNTING
Origin of Book Keeping and Accounting
• In the late 15th Century, the science of accounting rapidly developed under
pressures brought about by ICT.
• Much thinking in the profession is now mainly dictated by two UK and
USA as the influence of Italy dwindles.
• The Industrial Revolution in Europe during the 18th and 19th centuries
produced many significant social and economic changes that impacted on
accounting.
• This brought about the need for the periodic reporting of results of
operations by companies to their owners as opposed to the venture system.
• It also led to the emergence new areas of accounting like stewardship
accounting, cost and management accounting, statutory audit and MIS,
among others.
• The development of ICT marked yet another important point in the history
of accounting.
• Accounting history is a continuous exercise that seems to have no
foreseeable end.
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10. NATURE AND PURPOSE OF ACCOUNTING
Historical Development of Accounting and Accounting Profession in
Nigeria
• Book-keeping and accounting started long before the coming of the
Europeans.
• Properly, organized systems of trade and government were in existence
in the ancient kingdoms and empires of Benin, Oyo and Kanem Bornu,
which are in the present day Nigeria.
• The fact cannot, therefore, be denied that these systems of trade and
governance were in need of accounting information.
• The granting of a Royal Charter in 1886 to the National African
Company, which later became the Royal Niger Company of Nigeria,
made it compulsory for the company to keep proper accounting records.
• The laws and regulations governing accounting in Nigeria were almost
the same as the ones in Britain, since most of the early professional
accountants were either British or were Nigerians trained in Britain.
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11. NATURE AND PURPOSE OF ACCOUNTING
Historical Development of Accounting and Accounting Profession in
Nigeria
• The Yaba College of Technology was the first higher institution
of learning in Nigeria to offer accounting courses.
• Other institutions, inlude Institute of Administration, Ahmadu
Bello University, Zaria; and the Institute of Management
Technology (T.M.T.) Enugu follow suit.
• After 1962, accounting degrees and diplomas programmes
were started by some Nigerian universities and polytechnics,
namely the University of Nsukka, the University of Lagos, the
University of Ibadan (formerly, College of Art and Science,
Ibadan) and the Kaduna Polytechnic.
• Year after year, the number of institutions offering courses in
accounting continues to increase. Today, there are an upward
of 170 universities, polytechnics, monotechnics and colleges
of education in Nigeria which offer various courses in
accounting. 11

12. NATURE AND PURPOSE OF ACCOUNTING
Historical Development of Accounting and Accounting Profession in
Nigeria
• The history of professional accountancy bodies in Nigeria can
be traced to the late 1960’s with the formation Association of
Accountants of Nigeria (AAN).
• The Association had three main objectives, as follows:
to provide a platform for accountants (and auditors) in Nigeria
to discuss issues relating to their profession;
to introduce, maintain and improve professional code of
conduct and standards; and
to establish training programmes and examinations leading to
granting of local professional accounting qualification.
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13. NATURE AND PURPOSE OF ACCOUNTING
Historical Development of Accounting and Accounting Profession in
Nigeria
• The acceptance of the Association by the various sectors of the
Nigerian economy led to official recognition given by the Federal
Government on the 28th September, 1965 through the passing
into law the Act of Parliament No. 15 of 1965, establishing the
“Institute of Chartered Accountants of Nigeria” (ICAN).
• Akintola Willams was the first Nigerian to qualify as a Chartered
Accountant.
• Others are F.C.O. Coker, Kunle Oshindero, Zaccheus Osasanya,
Hamza R. Zayyad, Daniel Easton, William Bond, Aliko
Muhammad, etc.
• Pioneer accounting firms in the country include Akintola Williams
& Co. (the first indigenous accountancy firm in Nigeria). Peat
Marwick & Co., Casselton Elliot & Co., Pannell Fitz Patrick & Co.,
Coopers and Lybrand and Z. Ososany & Co.
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14. NATURE AND PURPOSE OF ACCOUNTING
Historical Development of Accounting and Accounting Profession in
Nigeria
• By 1979, the Association of National Accountants of Nigeria (ANAN)
was formed.
• During the Shagari civilian government of October 1979 to December
1983, the Bill recognizing the ANAN as a professional accountancy
body was passed on 8th September, 1981, by the House of
Representatives, but the Bill was rejected by the then Senate, and
therefore could see the light of the day.
• CITN was chartered by the Federal Government of Nigeria through
Decree No. 76 of 1992.
• On 15th August, 1993, ANAN was granted its charter through
Decree No. 76 of 1993.
• Today, there are a number of accounting bodies and associations
that are seeking government recognition in Nigeria.
• In the years to come, there may be more bodies regulating the
practice of accountancy in Nigeria.
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15. NATURE AND PURPOSE OF ACCOUNTING
1.5.1 Roles of Accounting
• Supports Management Planning and Decisions
• Promotes Efficiency
• Ensures regular flow on information
• Enhances budget and budgetary control
• Determination of results of operations
• Reduce wastages and Fraud
• Enables Determination of Tax Liability
• Enhances financial administration and treasury
management Provides Information on firm’s financial
health
• Aids performance evaluation
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16. NATURE AND PURPOSE OF ACCOUNTING
1.5.2 Branches of Accounting
•Financial Accounting
•Cost Accounting
•Management Accounting
•Government Accounting
•Taxation and Tax Management
•Auditing
•Oil and Gas Accounting
•Environmental Accounting
•Forensic Accounting
•Management Information System
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17. NATURE AND PURPOSE OF ACCOUNTING
•1.5.3 Qualities of Good Accounting Information
• Relevance: It must include enough facts to satisfy the
need of the user.
• Reliability: The source of information must be verifiable,
unbiased and free from error.
• Comparability: use of the same basis for preparation of
accounts.
• Timeliness: Accounting information must be made
available early enough for its use.
• Objectivity: There must be no bias, window dressing or
subjective judgments in the presentation of accounting
information.
• Comprehensiveness: Accounting information should
contain enough details for good understanding.
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18. NATURE AND PURPOSE OF ACCOUNTING
Users of Accounting Information and their Information Needs
1.6.1 Internal Users (Primary Users)
Internal users accounting information reside within the reporting company.
• Management
• Shareholders/Owners
• Employees
1.6.2 External Users (Secondary Users)
• External users of accounting information are user groups who lie outside of
the company. This includes the following:
• Suppliers
• Investors
• Barkers/Lenders
• Regulatory Agencies
• Customers
• Creditors
• General Public 18

19. NATURE AND PURPOSE OF ACCOUNTING
1.7 Accounting Concepts and Conventions (Principles) and Accounting Bases
• International Accounting Standard (IAS) 1 defined Accounting principles as
“a body of doctrines commonly associated with theory and procedures of
Accounting, serving as an explanation of current practices and as a guide
for selection of conventions or procedures where alternatives exist”.
1.8.1 Accounting Concepts
• This refers to those basic assumptions or conditions upon which the
science of Accounting is based. They are usually rules and conventions that
lay down the way in which activities of a business are recorded. These
concepts are:
• Entity Concept
• Going-Concern Concept
• Periodicity Concept
• Realization Concept
• Matching Concept
• Historical Cost Concept
• Money Measurement
• Dual Aspect Concept 19

20. NATURE AND PURPOSE OF ACCOUNTING
1.7.2 Accounting Conventions
• These are approaches which are followed by the Accountant in the
application of the accounting concepts. These include:
• Conservatism/Prudence
• Materiality
• Consistency Concept
• Substance over Form
• Objectivity/Fairness
1.8 Accounting Methods/Bases
An accounting method is the medium through which the fundamental
accounting concepts and conventions are applied to financial transactions,
and to the preparation of financial statements. They are:
Accrual basis: Under this basis, revenue and expenses are recognized in the
accounting period to which they relate and in which they are earned and
incurred and not when they are actually paid or received.
Cash basis: Under this basis, only revenue actually received and expenses
actually paid during the accounting period are recognized in that period.
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21. You have been a great
audience!