Accounting Definition; this is the practice and body of knowledge concerned primarily with methods for
recording transactions keeping financial information to the management and
advising on taxation maltose. American institute of certified
public accounting [AICPA 1961] says accounting is an act of recording, classifying
and summarizing in a significant manner and in terms of money transaction and
events and interpreting the results thereof. American accounting association
[AAA 1966] says accounting is a process of identifying measuring and
communicating economic information to permit inform judgment and decision by
users of that information.
Accounting can also be said to be a way to
communicate the financial health of a business or an organization in a
systematic way of recording, reporting and analysis of financial transaction of
a business. In a real sense all these definitions of
accounting are acceptable but they are by-cutting the aims and understanding of
accounting, coming to say the most and acceptable definition of accounting is
these; Accounting this is the systematic process of identifying, recording measuring
classifying, verifying summarizing, interpreting and communicating financial
information thereof. It also reveals profit and loss for a given period and the
value and nature of a firms asset/liabilities and owners equity. Accounting
provides information on the resources available to a firm, the means those
employed to finance the resources and the results achieved through their use. History
of accounting.
HISTORY OF
ACCOUNTING
It can be traced back ancient
civilizations and is thousand years old, the early development of accounting
dates back to ancient mesopotamia and is closely related to development in writing
and counting and money, there is also evidence for early forms of bookkeeping
in ancient Iran and early auditing system by ancient Egyptians and Babylonians,
the roman government had access to detailed financial information. The
double-entry bookkeeping developed during in medieval Europe and accounting
then split into financial accounting and
management accounting with the development of joint stock companies. Accounting was divided into
financial accounting and management accounting with the development of joint
stock companies. 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 of England and wales in 1880
EARLY DEVELOPMENT OF ACCOUNTING
Accounting records dating
back more than 700 years have been found in Mesopotamia and documents from
ancient Mesopotamia shows lists of expeditions and goods received and traded
the development of accounting along with that of money and numbers, may be related
to the taxation and trading activities of temples.
The early development of
account was closely related to development 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.
Other accounting records
were also found in the ruins of Babylon, Assyria which date back more than
7,000 years. The people of that time relied on primitive accounting methods to
record the growth of crops and herbs. Because there was a natural season to
forming and herding, it was easy to count and determine if a surplus has been
gained after the crops had been harvested or the young animal weaned.
EXPANSION OF
THE ROLE OF THE ACCOUNTANT
Between the 4th millennium BC and 3rd
millennium BC, the ruling leaders and priests in ancient iron had people over
see financial matters. In Godin Tepe yahya cylindrical tokens that were used in
buildings that had large rooms for storage of crop. In Godin Tepe’s finding the
scrip only contained tables with figures while Tepe Yahya findings contained
scrip and graphical representation. The invention of a form of bookkeeping
using clay tokens represented a huge cognitive heap for mankind.
During
the 1st millennium BC, the expansion of commerce and business
expanded the role of the accountant. The Phoenicians invented a phonetic
alphabet “probably for bookkeeping purpose” and there is evidence that an
individual in ancient Egypt held the title comptroller of the scribes there is
also evidence for early form of management consulting and auditing in the old
testament for example the book of Exodus describes Moses engaging it hammer to
account for materials that had been contributed towards the building of the
tabernacle.
By
about the 4th century BC the ancient Egyptians and Babylonians had
auditing systems for checking movement in and out of storehouses, including
oral “audit report” resulting in the term auditor (from audire to hear in
latin). By the 2nd century BC the importance of taxation had created
a need for the recording of payments and the rosetta stone also includes a
description of a tax revolt.
LUCA PACIOLI THE DOUBLE-ENTRY BOOKKEEPING SYSTEM
In the 13th country merchants based on
bookkeeping to oversee multiple simultaneous transaction financed by bank loans
one important breakthrough that took place around that is the introduction of
the double entry bookkeeping system. Bookkeeping system with involves a debit
and a credit entry for transaction or for with majority of transaction the
historical origin of the use of the word “debit and credit in accounting goes
back to those of single entry bookkeeping with had as its chief objective of
keeping tract of amounts owned by customer [debtors] and amount owed to creditor. Debit in latin
means “he owes” and credit in latin means “he trust”
The earliest extant evidence
of full double-entry bookkeeping appears in the farolti ledger of 1299 -1300.
the oldest discovered record of a complete double-entry system is the messari
[Italian; treasers] account contains debits and credits journalized in
bilateral form and carry forward balances from the preceding year and therefore
enjoy general recognition as a double entry system. Arithmetic, geometry, ratio
and proportion this was first printed and published in vence in 1494. it
included a 27- page trractise on bookkeeping . “particularis de computis et
scrituris “ it means “details of calculation and recording” pacioli has a book that he wrote. He wrote the and it sold mainly to merchants who
used the book as a refrence text as a source of
pleasure from the
mathematical puzzles it contained , and
to aid the education and their sons his work represents the first known printed
treatise on bookkeeping, and it is widely belived to be the forerunner of modern
bookkeeping practise. In summary in arthematics pacioli introduced symbol for
“plus” and “minus” for the first tune in a printed book. Symbols which became
standard notation in Italian renaissance mathematics. Sum arithmetica was also
the first known book printed in Italy to contain algebra. Although luca pacioli
did not invent double- entry book keeping n his 27 page treatise on bookkeeping
contained the first ever known published work on that topic, and is said to
have laid the foundation for double – entry bookkeeping as it practiced today although Pacioli's work or treatise exhibits
almost no originality , it is generally considered as an important work mainly because of its wide circulation it
was written in vernacular Italian language and it was printed in a book pacioli saw accounting as an ad-hoc ordering system devised by a merchant.
Its regular use provide the merchant with continued information about his business,
and allows him to evaluate how thing one going to act accordingly.
Pacioli recommends the Venetian
method of double entry booking above all others. Three books which are major
are involved in the book of account which one direct basis of the system.
1. The memoriale (Italian:
memorandum)
2. The giornale (journal)
3. The quaderno (ledger)
The ledger classes as central documents and is
accompanied by on alphabetical index Pacioli’s treatise gave instruction on
recording barter transactions in a varity of currencies –both of which were far
more common than today. It also enable merchants to audit their own books and
to ensure that their entries in the accounting records made their book-keepers
complied with the method he described. Without such a system all merchants who
do not maintain their own record were at greater risk of theft by their
employers or agents: It is not by accident that the first and last items
described in his treatise concern maintenance of an accurate inventory.
MODERN PROFESSIONAL ACCOUNTING
The modern profession of the charted accountant
originated in Scotland in the nineteenth centuery. During this time accountants
often belong to the same association offered as solicitors, and the latter
solicitor sometimes offered accounting services to their clients. Early modern
accounting had similarities to today’s forensic accounting. Forensic accountants
today incorporate their duties of expert’s financial witnesses into their
general services rendered. An 1874 circular announcing practices of one James Mcclelland
of Glasgow promises he will make statements for laying before arbiters, courts
or council.
In July 1854 the institute of Accountants in Glasgow
petition Queen Victoria for a Royal charter. The petition signal by 49 Glasgow
accountants, augured that the profession of accountancy had long existed in Scotland
as a distinct profession of great respectability, and that although the numbers
of practitioners had been originally few the number had been rapidly
increasing. The petition also pointed out that accountancy required a varied
group of skills as well as mathematical skills for calculation, the accountants
had to have an acquaintance with the general principles of legal system as they
were frequently employed by the courts to give evidence on financial matters.
The name charted Accountants’ for members. By the middle of the 19th
centuary, Britains industrial Revolution was in full swing and land on was the
financial centre of the world. With the growth of the limited liability company
and large scale manufacturing and logistics demand surged for more technically
proficient accountants capable of
handling the increasingly complex world of high speed global transactions able
to calculate figures like assets and depreciation and inventory valuation and
cognizant of the lastest in legislation such as the new company laws then being
introduced. As companies propitiated, the demand for reliable accountancy short
up, and the profession rapidly become and integral pert of the business and
financial system. To improve their status and combat critism of low standards,
local professional hardies in England amalgamated to form the institute of
chartered Accountants in England and wales, established by royal charter in
1880. Initially with just under 600 members, the newly formed institute expand
rapidly, it soon drew up standards of conduct and examinations for admission
and member were authorized to use the professional designations F.C. A (Fellow
chartered Accountants), for a firm partner and A C A (Associate charted
Accountant) for a qualified member of accountants staff. In the United States
the American institute of certified public Accountant was establishes in 1887
1. Business idles (or win
/megrual- Hill series in principles of Accounting) (1998-2011)
2. New man, Amy, and scott ober.
Business communication and Business Accounting: In person in online masen:
south- western (2013)
BRANCHES OF
ACCOUNTING
Accounting can be divide into several areas of
activity.
These can certainly overlap and they are often
closely intertwined, but it is still useful to differentiate them because
accounting professionals tend to organize themselves around these various specialties,
some are listed here and explained:
1. Financial Accounting
2. management Accounting
3. Auditing
4. Tax Accounting
5. fund Accounting
6. forensic Accounting
7. Accounting systems
installation
8. fiduciary Accounting
FIDUCIARY ACCOUNTING: This is a branch of accounting
that deals with the handling of different accounts managed by an individual
entrusted with the guardianship and management of property and possessions for
the benefit of another party.
ACCOUNTING SYSTEM INSTALLATION: This deals with
installation of accounting procedures for the gathering of accounting financial
data and embrace the designing of accounting forms to be used in the date
gathering process. Accounting system is closely related to management advisory
services. Succeeding in this field nowadays requires technical knowledge and
skills in information technology.
AUDITING: It is said that the work of
an auditor begins when the work of an accountant ends. Auditing deals with the
inspection of the financial statements, which were prepared in financial
accounting by independent certified public accountant. The purpose of auditing
is for the independent CPA (called the auditing) to express an opinion
regarding the fairness of the presentation of financial statements and thus
increase public and investor trust.
TAX
ACCOUNTING:
This branch involves the preparation of tax returns and the rendering of tax
advice to clients, such as determination and verification of tax consequences,
the effect of taxes in the business operations, tax minimization through logical
means and the like. Take note that tax accounting is not the some as government
accounting.
GOVERNMENT ACCOUNTING: This branch of accounting
deals with the transaction of the national government and its different
agencies. Government accounting mainly focuses on the safekeeping of public
funds and for the purpose to which such funds are committed or devoted.
FINACIAL
ACCOUNTING: This
branch of accounting deals with journalizing of business transaction,
preparation of financial statements and communicating the information about
economic effects of the accounting transactions and events to external users.
Financial accounting focuses on the preparation of five basic financial statements,
namely- statement of financial position, statements of comprehensive income, statement
of cash flows, statements of changes of equity, and notes to financial
statement.
MANADEMENT
ACCOUNTING:
This branch of accounting deals with gathering and communication of information
to be used by internal users (mainly the management). It includes services to
client on matters of accounting, financing, business policies, organizational
producers, product costs, distribution and many areas regarding business.
Management accounting could either be employed by the entity availing of the
services (internal) or an independent CPA (external). CPAs in this field are
commonly called management accountants, internal auditors or management
consultants.
TYPES OF
ACCOUNTING
Accounting is the art of analyzing and interpreting
data. It may not be apparent to some but every business and every individual
uses account in some form. An individual may knowingly or unknowingly rise
accounting when he evaluates his financial information and relays the results
to others accounting is an indispensable tool in any business, may it be small
or multi-national.
The
term “accounting” covers many different types of accounting on basis of groups.
The following are types of accounting:
1. private or industrial
accounting
2. public accounting
3. governmental accounting
4. national income accounting
5. project accounting
6. social accounting
7. sustainability accounting
8. fund accounting
9. cost accounting
PROJECT
ACCOUNTING:
Refers to the use of accounting system to track the financial progress of a
project through frequent financial reports. Project accounting is a vital component
of project management accounting with a prime focus on the launch of a new
product. Project accounting can be a source of competitive advantage for
project-oriented business such as construction firms.
GOVERNMENT
ACCOUNTING:
This can also be reffered to as federal or public accounting, this type of
accounting refers to the public sector. This is a slight deviation from the
financial accounting system used in the private sector. The need to have
separation accounting system for the public sector arises because of the
different aims and objective of the state owned and privately owned
institutions. Government accounting ensures the financial positin and
performance of the public- sector institution are set in budgetary context
since financial constraints are often a major concern of many governments
separate rules followed in many jurisdiction to account for the transactions
events of public entities.
SOCIAL
ACCOUNTING:
This is also known as coorperate social responsibility reporting and
sustainability accounting, refers to process of reporting implications of an
organizations activities on its ecological social environments. Social
accounting is primarily reported in the form of environmental reports accompanying
the annual reports of companies. Social accounting is still in the early stages
of development and is considered to be a response to the growing environmental
consciousness amongst the public at large.
NATIONAL
INCOME ACCOUNTING: This accounting refers to the economic or social concept in
establishing accounting rather than the usual business entity concept. The
national income accounting is responsible in providing the public an estimate
of the nations annual purchasing power.
The GNP (cross national product) is a related term, which referes to the total
market value of all the goods and services produced by a country within a given
period of time usually a calendar year.
PUBLIC
ACCOUNTING:
public accounting refers to the accounting services offered by a public
accountant to the general public, when a practitioner client relationship
exist, the accountant. Public accounting is considered to be more professional
than private accounting. Both certified accountants can be single practitioners
or by partnership ranging in size from two to hundreds of members. The scope of
these accounting firms can include local, national and in for national
clientele
ADVANTAGES OF
ACCOUNTING:
They are so many advantages of accounting but this
ones lited below are the most important and I have evidence about them they are
as follow:
1. provides financial
information about the business
2. provides assistance to the
management
3. helps in comparison of financial results; comparison of its own results of different tears, comparison
of financial results with other firm the industry
4. helps in decision making
5. accounting information can
be used as an evidence in legal matters
6. helps in valuation of the
business
assistance to management: accounting
provides information to the management
to enable it to do its work properly.
Such information helps the planning, decision making and controlling of the
firm
7. comparative study: a
systematic record enables a business to compare one year’s result with those of
the other years and locate significant
factors learning to the change if any.
8. evidence in the court:
systematic of record transactions is often treated by the courts as good evidence
9. it provides useful
information form making economic decisions
10. it facilitates comparative
study of current year’s profit, sales, expenses etc. with those of previous
years.
LIMITATION/DISADVATAGE
OF ACCUONTING
1. accounting is historical in
nature it does not influence the current financial position or worth of a
business.
2. transaction of non-monetary
mature do not fined place in accounting .accounting is limited to monetary
transaction only, it excludes qualities element like management, reputation,
employee morale, labour strike etc.
3. accounting principle are not
static or unchanging-alternative accounting procedures are often equally
acceptable therefore, accounting statement do not always presents comparable
data.
4. cost concept is not found in
accounting price change are not considered. Many value pound to change often
from time to time. This is a strong limitation of accounting
5. Accounting statement do not
show the impact of inflection.
6. The accounting statement do
not reflect those increase in net access
values that are considered realized.
7. Accounting ignores non-monetary transaction.
8. Accounting information is
sometime based on extemate which may unrealistic.
9. window dressing may lead to
faulty result.
10. Accounting information can
be manipulated and those can not be considered as true test of performance.
METHODS OF
ACCOUNTING
Business transaction are recorded in two different
ways
1. single entry
2. double entry
Single entry: it is incomplete system of
recording business transaction. The business organization maintain only cash book
and personal account of debtors and are differs. So the complete recording of
transaction cannot be made and trail balance cannot bee prepared.
Double entry: in this system every business transaction is having a two fold effect
of benefit giving and benefit receiving aspect. Recording is made on basis of
both these aspect. Double entry is an accounting system that record the effect
of transaction and other events in at least two account with equal debits and
credit.
STEPS INVOLVE
IN DOUBLE ENTRY SYSTEM
A. PREPARATION JOURNALS
B. PREPARATION OF LEDGER
C. TRAIL BALANCE PREPARATION
D. PREPARATION OF FINAL ACCOUNT
A. preparation of journal:
journal is called a book of original
entry. It records the effect of all transaction for the first time. Here the
job of recording takes place.
B. Preparation of ledger: the
ledger is the collection of all accounts. Used by a business hence the grouping
of account is performed is posted to the ledger.
C. Trail balance preparation:
summarizing. It is the summary of ledger balances prepared in the term of
ledger.
D. Preparation of final
account: at the end of the accounting to know the achievements of the
organization and its financial state of affairsb the final accounts are
prepared.
ADVANTAGE OF DOUBLE ENTRY SYSTEM
1. scientific system
2. complete record of
transaction
3. a check on the accuracy of
accounts
4. ascertainment of profit or
loss
5. knowledge of the financial
position of the business
6. full details for purpose of
central
7. comparative study is possible
8. helps management in decision
making
9. no scope of fraud.
Scientific system: this system is the only
scientific system of recording business transactions in a set of accounting
records. It helps to attain the objectives of accounting.
Complete record of transaction: this system
maintains a complete record of all business transactions.
A check on the accuracy of accounts: by the use of
these system the accuracy of accounting book can be established through the
device called a trail balance.
Ascertainment of profit or loss: the profit earned
or loss suffered during a period can be ascertained together with details by
the preparation of profit and loss.
NO SCOPE
FOR FRAUS: the
from is saved
from travel and
misappropriation since full
important about all
assets and liabilities
will be available
HELPS MANAGEMENT
IN DECUSION MMAKING:
the management may
be also be
able to obtain
good information for
its works specially
for making decisions:
FULL DETAILS
FOR THE PURPOSES
OF CONTROL: this
system premise account
to be prepared
or kept in as much
detail as necessary
and therefore, affords significant
information for purpose
of control etc
MEANING
OF CREDIT AND DEBIT
The term "debits" is
supposed to have
derived from debit
and the term
" credit" is derived
from the word
"creditable". for convenience
Dr is used
for debit and
Cr is credit,
Recording of transaction
require your thorough
understanding of the
rules of debit
and credit relating
to accounts. Both debit
and credit may
represent either increase
or decrease depending
upon dating of
accounts
TYPES OF
ACCIOUNTS
The
object of bookkeeping
is to keep
a complete record
of all transactions that
place in the
business .to archive
this transaction have
been classified into
three categories;
1
Transaction relaying to
persons
2
Transaction relating properties
and assets
3
Transaction relating to
income and expenses .
The account falling under
the first heading
is called "personal accounts"
The
account falling under
the second heading
is called or
know as Real
Accounts.
The
account falling under the third heading
are called norminal account. The accounts can also be classified as personal and impersonal accounts.
The
chart below will
help us to understand
and know various
types of account
we have:
Personal accounts: account recording transaction with a person or group
or persons are known as accounts. These accounts are necessary in particular to
record credit transaction. Personal accounts are of the following types.
NATURAL ACCOUNT (PERSONS): an accounts recording
transactions with an individual human being is formed as a natural persons or
personal accounts example James Armstrong’s account Drexel’s account etc both
male females are included in it.
ARTIFICIAL OR LEGAL ACCOUNT (PERSON): an account
recording financial statement or transactions with an artificial person
credited by law or order wise termed as an artificial person.
Personal account: example firms account, limited
companies accounts educational institutions account, co-operative society etc.
GROUPS/REPERESENTATIVE PERSONAL ACCOUNTS: an account
directly representing a person or persons is known as representative personal
account. When account are of similar nature and their number is large it is
better tot group them under one head an open a representative personal account
example prepared insurance. Outstanding salaries, rent, wages etc.
when a person starts a
business, he is known as a proprietor. This proprietor is represented by
capital account for all that he invest in business and by drawings account for
all that which he withdraws from
business. So capitals accounts and drawings accounts are also personal
accounts.
The rule for personal account is debit the receiver and
credit the giver.
REAL ACCOUNTS: accounts relating to properties or assets are
known as “real account”. A separate accounts is maintained for each asset
example cash, machinery, building, etc real accounts can further be classified
into tangible and intangible.
A.
TANGIBLE REAL ACCOUNTS: these accounts represents asset and properties
which can be seen, touched or felt , measured, purchased and sold. Example cash
account furniture, account, machinery account, stock accounts etc.
B.
INTAGIBLE REAL ACCOUNTS: these accounts represent assets and properties which can not be seen, touched felt,
but can be measured in terms of money e.g goodwill accounts patents, account,
trade –mark accounts, copy rights accounts etc.
The rule for
real account is “debit what comes in and credit what goes out”
NORMINAL ACCOUNTS:
Accounts
relating to in-come, revenue, gain expenses loses are firmed as nominal
accounts. These accounts are also known as fictitious account as they do not
represent any tangible asset. Separate account is maintained for each head or
expenses or loss and gain or income. Wages account, rent accounts, commission
account, interest received account are some example of norminal accounts.
The
rules for norminal accounts is “debit all expenses and losses.” “credit all
income and gains”
DISTINTION BETWEEN BOOKKEEPING AND ACCOUNTING.
The
different between bookkeeping can be summarized in a table below:
BASIS OF DIFFERENCE
|
BOOKKEEPING
|
ACCOUNTING
|
Transactions
|
Recording of transactions in book of original
entry
|
To examine these recorded transactions in order to
find out their accuracy.
|
Posting
|
To make posting in larger
|
To examine these posting in order to ascertain its
accuracy.
|
Total/balance
|
To make of the amount in journal and account of ledger.
To ascertain balance in all the account.
|
To prepare
trial balance with the help of balances of ledger accounts.
|
Income statement and balance sheet
|
Preparation of trading profit and loss account and
balance sheet is not bookkeeping.
|
Preparation of trading profit and loss accounts
are balance sheet is included in it.
|
Rectification of errors
|
These are not included in bookkeeping
|
These are included in accounting.
|
Special skill and knowledge
|
It does not require any special skill and
knowledge advanced countries this work is done by machines
|
It require special skill and knowledge
|
Liability
|
A bookkeeping is not liable for accountancy
work
|
An accountant is liable for the work of
bookkeeper.
|
IMPORTANT OF ACCUONTING
The
purpose of accounting is to accumulate and report on financial information
about the performance, financial position, cash flows of a business. These
information is then used to reach decision on how to manage the business or
invest in it, or lead money to it.
These
information is accumulated in accounting records with accounting transactions,
which are recorded either through such standardized business transaction as
customer invoicing or supplier invoices or through supplier invoices, or through more specialized
transactions known as “journals entries”
Once
these financial information has been stored in accounting record, it is
usually compiled into financial
statements which include the following document.
1. income statement
2. balance sheet
3. statement of cash flows
4. statement of retained
earning
5. disclosure that accompany financial statement
financial statement are assembled under certain sets
of rules known as accounting fram work of which the best known are generally
accepted accounting principle (GAAP) and
international financial reported standards (IFRS). The results shown in
financial statements can very somewhat depending on the framework used. The
framework that a business uses depends upon which one recipient of the
financial statements want thus, a European investor might went to see financial
statements based on IFRS, while om American investor might want to see
statements that comply with GAAP.
The
accountant also generate additional reports for special purpose such as
determinig the profit on sale of a product, or the revenues generated from a
particular sales region these are usually considered to be managerial reports
rather than the financial reports issued to the outsiders.
Thus
the main purpose of accounting centres on the
collection and subsequent reporting of financial information.
RELATIONSHIP BETWEEN ACCOUNTING AND BUSINESS
Accounting is the primary subject of business it is
important without accounting in it is futile to venture into such affair
because it might turn out worthless and time consuming and money wasting
because where and how to control the situation of financial and economic
balance regarding, some as accounting is also business so without accounting
there is no business same as no business no accounting is practiced.
BUSINESS
INTRODUCTION: I am going to discuss five ways in
which business can be analyzed they are:
THE CONTEXT OF BUSINESS
ENTERPRENEUSHIP AND LEGAL FORMS OF BUSINESS
MARKETING
ACCOUNTING FINANCE AND BANKING
MANAGEMENT
THE
CONTEXT OF BUSINESS: describing us GSP norminal and real GDP growth rate, GDP
per capital inflation, federal budget/deficit/surplus, industries economic
indicators.
ENTERPRENEURSHIP
AND LEGAL FORMS OF BUSINESS: identifying the pros and cons of legal forms of
business, the use of tax rates to calculate the after-tax profit of various terms of business.
MARKETING: In this aspect we discuss market size,
markets, market share, demographics, customers, segmentation, by demographics,
behaviors, phychlographics, geography analyze the cultural aspects of
marketing.
ACCOUNTING FINANCE AND BANKING: we describe and
analyze the components of the income statements and balance sheet, comparing
key financial ratios such as profit margin, return on equity, dept to equity
ratio across companies, also understand the time value of money.
MANAGEMENT:
analyzing cooperate mission, cultural leadership social responsibility of a
company also identify and compile relevant employee benefits and engage in
simple labour negotiation.
DEFINITION OF BUSINESS
A
persons regular occupation profession or trade, or even a commercial activity,
a situation or series of events,
An organization or enterprising entity engaged in
commercial industrial or professional of buying and selling of goods and providing services in exchange for
money
The activity of buying and selling commodities
product or service in and attempt to make profit.
From my own point of view I have come to say
business has no approved or specific definition so business is an organization
or economics entity where goods and services are exchanged for one another or
for money.
Every
business require some form of investment and enough customers to whom it out
put can be sold on a consistent basis in order to make a profit.
HISTORY OF BUSINESS
Business history deals with the history of business
organization, methods, government regulation, labour relations and impact on
society. It also includes biographies of individual companies, executive and
entrepreneurs, it is related to economic history.
Economic
history is a study of economics or the economic phenomena in the past. Analysis
in economics history is undertaken using a combination of historical methods,
statistical methods and applying economics theory to historical situations and
institutions. The topic includes business
History, financial history and overlaps with area of
social history such as demographic history and labour history
BRANCHES OF BUSINESS
Business is sub-divided into many area of
specifications but here are some basics we need to knew about business they are
as follows
1. METAL
2. CONSTRUCTION
3. AUTOMATIVE
4. WOOD INDUSTRY
5. INDUSTRY
METAL: These are metal workers, fitters, and steel
fabricators machinery and equipment manufactures and the metal working and
processing industry. In this field the highest level of precision is required,
they is extensive range of assortment it may include for drilling, milling,
culling or welding
Another
important part of this field includes plumbers, electricians, solar installers,
and equipment producers.
CONSTRUCTION: In these field of work, it involves
heavy duty fastening and diamond cutting technology as well as construction
tools. Construction chemicals and safely
equipment.
AUTOMOTIVES: Here it solely depends on automotive
supply, car body paint shops, farming machinery workshop, automotive trucking
companies, cart operator and many others.
Electronics
and machines largely determine the requirement of this field of industry,
therefore products of highest quality are needed. Here we offer the best
assortment and comprehensive services whether it be hand tools automotive
hardware, workshop chermicals compressed air techniques and workshop supplies
WOOD INDUSTRY: Here it involves wood builders,
carpenters interior decorations, wood industrial and many others. This is
somewhat a secondary branch but of a primary perspective.
INDUSTRY: The various requirement of the classic
crafts fields need compartment services and deliverance suppliers consolidation
reduction of litigation cost and the use of a variety of electronic solution
are required.
ADVANTAGES OF BUSINESS
= Your are your own boss
=Your have freedom and luxury enjoy
=Your do something you really enjoy
=Your are not compelled to follow company rules
=Your can fulfill your dreams and become wealthy
=You can employ jobless friends, relatives and other
colleagues
=You can meet more interesting people
=Some of your current personal expenses can be
tax-deductible
=|The owner is making all the decisions and
centrelling the whole operations
NOTE: This are might be similar to that of a
sole-proprieter business take note
DISADVANTAGES OF BUSINESS
=You will have several basses, which are your
clients
=You risk your health because of stress and long
hours of work
=You will no longer receive regular pay cheque and
other benefit from your company.
=You will incur more unexpected expences
=You will become a sub-collector of the government
for income and other taxes
=You have to files a lot of papers with the
government
=You will risk losing your money invested in your
business
TYPES OF BUSINESS
Before you engage in any business type you have to
known a lot about the business, here are some business type:
GREEN BUSINESS
STARTUPS AND HIGH GROWTH BUSINESS
HOME-BASED BUSINESS
ONLWE BUSINESS
FRANCHISE BUSINESS
BUYING EXISTING BUSINESS
SELF EMPLOYED AND WDEPENDENT CONTRACTORS
WOMEN-OWNED BUSINESSES
VETERAN- OWNED BUSINESSES
PEOPLES AND DISABILITIES
YOUNG ENTERPRENEURS
ENTERPRENEURS
NATIVE AMERICANS
MINORITY- OWNED BUSINESSES
GREEN BUSINESSES: Green businesses not only benefit
the environment, but also use, eco-friendly businesses practices as means to
market their products
STARTUPS AND HIGH GROWTH BUSINESSES: Startups
commonly are technology-based businesses and have high growth potential.
HOME-BASED BUSINESSES: Many well-known comparcies
like Apple and ford started as home-based businesses
ONLINE BUSINESSES: Establishing a businesses
presence on the internet can be a great way to sell and market goods and
services.
FRANCHISE BUSINESSES: Franchises can provide an
opportunity for ready-male business success, but they also come with a variety
of challenges.
BUYING EXISTING BUSINESSES: Buying an existing
businesses can be less risky than starting one from scratch, However known the
forms of purchases before doing so.
SELF EMPLOYED AND INDEPENDENT CONTRACTORY: Being
self employed or an independent contractor can often small businesses owners
flexibility as well as challenges
WOMEN-OWNED BUSINESSES: Learn about the wide range
of federal programs available to help women owned small businesses startup,
grow and succeed.
VETERAN-OWNED BUSINESSES: Start a small businesses
is a tremendous opportunity for veterans. The federal government has programs
specifically for and the military community.
PEOPLES WITH DISABILITIES: Starting a businesses can
be a great opportunity for these with disabilities because of benefits such as
work flexibility
Assets, liabilities, revenues and expense within
simple, familiar sceneries. Besides
developing in understanding of the role
of accounting via conventional reports recent developments including the
discharge of accountability by companies through the release of corporate
social and environmental reports and the global financial crisis are explored
through an accounting lens.
ACCOUNTING AND EVERYDAY LIFE
Over fifteen years have passed since Hopwood’s
(1994) call for further studies into the
relationship between accounting and every day life. Recognizing as a pervasive
technology that had come to permeate everyday life, Hopwood (1994, p.301)
advocated an increasing attention to be paid to the way in which accounting
becomes entwined with the everyday.
As accounting becomes more influential in everyday
life’s affers, it is important for us to have a greater insight into the
process through which that influence is created and sustained. The tethering of
accounting to the realm of the everyday becomes a significant area of the
study. So accounting has becomes part of everyday lives because of its vase use
and accounting.
BUSINESSES AND EVERYDAY LIFE
Since accounting started in ancient Mesopotamia
about 7,000 to 8,000 years ago businesses two have already started by them
because they alongsicle with accounting. When pacieli wrote the 27 page book that was printed he
had it mind to sell it mainly for the merchants because of their businesses,
these small 27, paged book happed the merchants to solve their equations
problem and in their businesses, businesses and accounting are like a car and
fuel or the fires
IMPORTANCE OF BUSINESSES
The existence and expansion of business are justification
of the importance of business. Business provides a lot of services to the human
beings that highlight its significance. These services are as follows.
1. supply of goods and services
2. harnessing capital and other
Resources in production
3. self employment and
provision of employment
4. preservation of natural
resources
5. Research and development and
innovation
6. Income generation
7. Interesting natural income
8. Contribution to social
development
9. Contribution in the
development of education, science and technology
10. Development of international
relations
SUPPLY OF GOODS AND SERVICES: Business provides
goods and services to the society, business provide or produces different
products which are sold and supplied to the society the creator created and
creates things, but processing the individuals or business does the
reprocessing and preservation and ultimately new utility is created. So
business provides goods and services to the society.
HARNESSING CAPITAL AND OTHER RESOURCES IN PRODUCTION
Business collects the drifts of saving from
different individuals, especially through banks and financial institutions and
employs those in productive activities and thus homes in economic activities to
utilize natural resources in creation or value addition and consequently, helps
production employment and resources utilization
SELF-EMPLOYMENT AND PROVISION OF EMPLOYMENT: Business
provides employment to the business man. Further, in the production
distribution and services of business a large number of individuals are
employed by the business organization and income generation occurs for them and
others.
PRESEVATION OF NATURAL RESOURCES: Business creates
new utility to the natural resources by preservation and value addition.
Different new products are created by business operation, without which a let
of natural resources would have been wasted
RESEARCHI DEVELOPMENT AND INNOVATION: Business
continuously makes research on alternative uses of resources development of new
products and methods and makes new innovation.
IMPORTANCE OF ACCOUNTING
The importance of accounting are numerous so we
aging to disuse few and most important they are as follows:
1. To known the financial
affairs of the business or firm
2. To be accurate in balancing of the transactions
3. Ascertainment of accounting
FINANCIAL AFFIARS: This has to do with the up to
date running of the firm to known how money flows and income statements are run
and to the financial position of the business organization
TO BE ACCURATE IN BALANCING TRANSACTION: In this
aspect accounting plays a bigger role of ascertaining proper use of accounting tools such as the journal
the trail balance and also treading profit and loss account is necessary to
show further prove of the business making profit or loss
ASCERTIANMENT OF ACCOUNT: The accounts in which the
business firm is working on is of correct proportion, the account is to make-sure such things don’t happen as
to record in wrong accounts.
Finally business is accounting and vice versa.
REFERENCES FOR ACCOUNTS AND BUSINESS
-. History of accounting: university of south
Australia April 30, 2013, reblieved December 28,2013 PRINTED IN south bench
press
- Oldrayd
David and Dobie, Alisdair: Themes in the history of bookkeeping, the Routledge
compendium to accounting History, London, july 2008 ISBN 98-0-415-41094-6
chapter 5, p. 96
-Grewal, T. B. Double Entry Bookkeeping
Jain and Nararny, Advanced Accountancy
R. L. Gupta, Advance Accountancy
-Ashish k. Bhataichargya (2004), financial
Accounting for Business managers, prentice Had of indium post Ltd, New Delhi
- S. N. Matheshwari (2oote) management Accounting
and financial
Control, sultan channel and sons, ltd.