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• Accounting can be traced back to prehistoric times, with the use of clay tokens to record transactions and the development of double-entry bookkeeping by Fra Luca Pacioli in 1494

  
• Accounting is a process of identifying, recording, and communicating economic information that is useful in making economic decisions
• Essential elements of the definition of accounting:

  • Identifying: analyzing each business transaction to determine if it's an "accountable event" or "non-accountable event"
  • Recording: recognizing and journalizing accountable events, then classifying their effects on accounts
  • Communicating: summarizing processed information to produce meaningful reports, like financial statements
• Accounting provides quantitative, qualitative, and financial information
• Functions of accounting in business:

  1. Providing external users with information for investment and credit decisions

  2. Providing internal users with information for managing the business
• Internal users of accounting information include business owners, board of directors, and managerial personnel, while external users include investors, lenders, creditors, and the public
• Forms of business organizations are discussed in accounting, including cooperatives and corporations
• Types of businesses according to their activities:

  1. Service business

  2. Merchandising (Trading)

  3. Manufacturing