In accountancy, an account is a label used for recording and reporting a quantity of almost anything. Most often it is a record of an amount of money owned or owed by or to a particular person or entity, or allocated to a particular purpose. It may represent amounts of money that have actually changed hands, or it may represent an estimate of the values of assets, or it may be a combination of these. Accountancy (profession) or accounting (methodology) is the measurement, disclosure or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. ... Quantity is a kind of property which exists as magnitude or multitude. ... This article or section needs additional references or sources to improve its verifiability. ... In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ...
Types of Accounts
Asset accounts: represent the different types of economic resources owned by a business, common examples of Asset accounts are cash, cash in bank, building, inventory, prepaid rent, goodwill, account receivable.
Liability accounts: represent the different types of economic obligations by a business, such as accounts payable, bank loan, bonds payable, accrued interest.
Equity accounts: represent the residual equity of a business (after deducting from Assets all the liabilities) including Retained Earnings and Appropriations.
Revenue accounts: represent the company's gross earnings and common examples include Sales, Service revenue and Interest Income.
Expense accounts: represent the company's expenditures to enable itself to operate. Common examples are electricity and water, rentals, depreciation, doubtful accounts, interest, insurance.
Contra-accounts: from the term contra, meaning to deduct, the value of which are opposite the 5 above mentioned types of accounts. For instance, a contra-asset account is Accumulated depreciation. This label represent deductions to a relatively permanent asset like Building.
Accounting In Mesopotamia, circa 3500 B.C. Five thousand years before the appearance of double entry, the Assyrian, Chaldaean-Babylonian and Sumeriancivilizations were flourishing in the Mesopotamian Valley, producing some of the oldest known records of commerce.
Government and bankingaccounts in ancient Rome evolved from records traditionally kept by the heads of families, wherein daily entry of household receipts and payments were kept in an adversaria or daybook, and monthly postings were made to a cashbook known as a codex accepti et expensi.
Among Roman accounting innovations was the use of an annual budget, which attempted to coordinate the Empire's diverse financial enterprises, limited expenditures to the amount of estimated revenues and levied taxes in a manner which took into consideration its citizens' ability to pay.
Financialaccounting is one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated.
Application of InternationalAccounting Standards originating in InternationalAccounting Standards Board headquartered in London and bearing more resemblance to UK than current US practices is often advocated by those who note the relative stability of the UK accountingsystem (which reformed itself after scandals in the late 1980s and early 1990s).
Accountingreform of a far more comprehensive sort is advocated by those who see issues with capitalism or economics, and seek ecological or social accountability.
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