If you donot have any idea about what accounting is, you may find it useful to have this knowledge before proceeding with learning accounting. The first book ever written on accounting was by Luca Pacioli (1445-1517). He is known as the father of accounting and was a mathematician by profession. There are often misconceptions regarding the answer to the
question "What is accounting". Contrary to the widely held belief, you do not need to be good at
mathematics to be good at accounting. All you need to know is basic mathematics. The good news is that you can be weak
at mathematics and still make a good accountant. Accounting consists of
recording and summarizing everyday business transactions in order to ascertain how financially successful those transactions have been and how much is owed and owned by the business. This information is very useful for decision making by the interested parties (for instance the
owners of the business if they are not actively taking part in the day to day running of the business and need to know whats going on). Even if the owner did take part in day to day running of transactions he will probably not remember every detail and will have to keep a record. This information may also be required by the tax authorities to ascertain the amount if tax due. The bank will need such information too if the business wants to borrow money since the bank will need to make sure the business is sufficiently profitable to pay the interest as it falls due and eventually the principal amount. This information will again be required if the business owner is looking to sell the business to somebody or invite a prospective partner. Transactions must be recorded as they
occur and summarized at the end of the period. The summarized statement
which reflects the position of a business at a point in time is known as
"balance sheet" in accounting language.
