Treasure chest

 

Accounting can be said to be the history of money, tracing its movements from the producer, through the wholesaler, distributor, high-street shop and ending up with you as the consumer.

In this respect, accounting and finance are intertwined - as they both keep a record of where money originates from and where they are transferred.

In a broader aspect, one could argue that accounting is the basis for the world economic history. As long as money has been around as a means of payment, accounting has been just as important in depicting the rise and fall of businesses.

But accounting is more than just keeping record of money being transferred through the economy. It entails valuation of the assets we occur, either as an individual or as a company. Just look at your personal economic wealth. With your income from employment, you probably have accumulated a home, a car, furniture, clothes etc. All this accumulates to your personal wealth.

Cash register

 

The same applies to a business, whatever size. Accounting is thus about using funds to accumulate even more funds. It is modern wealth management set out in day to day book-keeping, so that one can evaluate future investment plans based on previous success or failure.
The accounting encyclopedia is designed to give you an insight into the vast terminology of accounting, leaving you with better understanding of its importance.  And maybe, it could help you in managing your own business, even if you are not familiar with the field of accounting.

Note that definitions herein need not be correct in relation to academic requirements. Although every definition is rigorously checked, it may differ from those given by lectures at university. Should you choose to use this site as a reference for your academic work, please spend some time checking alternative sites for further reading on the subject, as well as consulting your lecturer/ professor.

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