Lesson 1: Introduction to Accounting

• What is the definition of accounting?

  Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature. It is about economic entities. It is intended to be useful in making economic decisions and in making reasoned choices among alternative courses of action.
• What is the primary function of accounting?

  To provide useful information for economic decisions.
• What does accounting primarily deal with?

  Economic entities.
• Why is accounting considered a service activity?

  Because accounting firms provide paid services.
• What is the nature of accounting?

  It is an art, financial, and a process.
• How is accounting described as an art?

  It involves a systematized process.
• What does the process of accounting entail?

  It uses a step-by-step method without skipping steps.
• What is one function of accounting?

  Maintenance of systematic records.
• How does accounting assist management?

  By providing financial reports and statements.
• What is a key aspect of accounting's role in business?

  It dictates the status and flow of the organization.
• Why is accounting considered the language of business?

  It communicates financial information effectively.
• When can the history of accounting be traced back to?

  Ancient civilization over 7,000 years ago.
• Where were early accounting records found?

  In Mesopotamia, Babylon, Assyria, and Sumeria.
• What did Luca Bartolomeo de Pacioli contribute to accounting?

  He introduced the term "accounting" and double-entry system.
• What is the title of Pacioli's published book?

  Summa de Arithmetica, Geometria, Proportioni, et Proportionalita.
• What does the Double Entry Accounting System state?

  Every entry has a corresponding opposite entry.
• How does accounting serve as an effective way to manage finances?

  It translates all transactions into monetary terms.
• What are the main functions of accounting?

  • Maintenance of systematic records
  • Communication of financial results
  • Meeting legal requirements
  • Protecting business assets
  • Assisting management
• What is the significance of accounting in business?

  • Dictates status and flow of organization
  • Provides financial insights for decision-making
  • Essential for growth and financial management