The word “ACCOUNTING” means “Language of Business“. As we know the main aim of Business is only to earn Profit. But how much profit is earned by business or is there any loss suffered by it. The real story about the operations of business can only tell Accounting. That’s why! we said that, “Accounting is the Language of Business.”
The business owners, managers,cashiers and salesmen use the term accounting to explain the business events. You will find that many of the terms used in accounting have obvious different meanings in non-accounting usage. If you need the knowledge of accounting you will have to know about the business operations and the basis on which business decisions are made.
The Professionals and business accountants must be expert in the use of this language. You know every language change gradually to meet the changing needs and requirement of the society. In the same manner, changes and improvements in accounting are also constantly being made, to satisfy the changing business information. No doubt, Today, in the age of COMPUTERIZATION every information can be collected easily and very early, but accounting is the brain of the business, without proper accounting all information and the data provided will be incorrect and misleading.
EVOLUTION OF ACCOUNTING
Just like Science, Arts or other social or economic field of human life, Accounting also has a history. If we study the civilization of mankind, then we can say that in every period, there was a recording of business and financial information.
With the development of society, the techniques of recording business information also changed and now-a-days, it become more complex as compared to old days.
The function of accounting is as old as the barter system. In Babylon, some 3700 years Before Century (BC) ago clay tables were used to record the payment of wages. The history of Egypt and Greek tell us that Book-keeping was in practice in city states. During that primitive time period, the use of accounting was only to record limited type of financial operations of government or private enterprises. There was no systematic recording of financial transactions of a particular unit. During that primitive period, the usage of accounting was only to record specific types of transactions.
The first book describing the Double Entry System of Accounting was written by an Italian Mathematician Lucas Pacioli (1445 – 1515) [called “Father of Accounting” or “Pioneer of Accounting”] which was published in 1494 in Venice, namely “De viribus quantitatis”. He is the first person who describe the rules of book-keeping and use the terms like Assets, Equities, etc.
Now a days, commercial and business revolution maximize the scope and importance of accounting. In 21st century, the Role and Importance of Accounting is very increased due to globalization and International Investors.