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Accounting or accountancy is the measurement, processing, and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.
Accounting can be divided into several fields including financial accounting, management accounting, external auditing, tax accounting and cost accounting. Accounting information systems are designed to support accounting functions and related activities. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to external users of the information, such as investors, regulators and suppliers; and management accounting focuses on the measurement, analysis and reporting of information for internal use by management. The recording of financial transactions, so that summaries of the financials may be presented in financial reports, is known as bookkeeping, of which double-entry bookkeeping is the most common system.
Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are usually audited by accounting firms, and are prepared in accordance with generally accepted accounting principles (GAAP). GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board (FASB) in the United States and the Financial Reporting Council in the United Kingdom. As of 2012, "all major economies" have plans to converge towards or adopt the International Financial Reporting Standards (IFRS).
The history of accounting is thousands of years old and can be traced to ancient civilizations. The early development of accounting dates back to ancient Mesopotamia, and is closely related to developments in writing, counting and money; there is also evidence for early forms of bookkeeping in ancient Iran, and early auditing systems by the ancient Egyptians and Babylonians. By the time of the Emperor Augustus, the Roman government had access to detailed financial information.
Double-entry bookkeeping developed in medieval Europe, and accounting split into financial accounting and management accounting with the development of joint-stock companies. The first work on a double-entry bookkeeping system was published in Italy, by Luca Pacioli. Accounting began to transition into an organized profession in the nineteenth century, with local professional bodies in England merging to form the Institute of Chartered Accountants in England and Wales in 1880.
Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation. There are several standard methods of bookkeeping, such as the single-entry bookkeeping system and the double-entry bookkeeping system, but, while they may be thought of as "real" bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.
Bookkeeping is usually performed by a bookkeeper. A bookkeeper (or book-keeper) is a person who records the day-to-day financial transactions of a business. He or she is usually responsible for writing the daybooks, which contain records of purchases, sales, receipts, and payments. The bookkeeper is responsible for ensuring that all transactions whether it is cash transaction or credit transaction are recorded in the correct daybook, supplier's ledger, customer ledger, and general ledger; an accountant can then create reports from the information concerning the financial transactions recorded by the bookkeeper.
The bookkeeper brings the books to the trial balance stage: an accountant may prepare the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.
The bookkeeping process primarily records the financial effects of transactions. The difference between a manual and any electronic accounting system results from the former's latency (engineering) between the recording of a financial transaction and its posting in the relevant account. This delay—absent in electronic accounting systems due to nearly instantaneous posting into relevant accounts—is a basic characteristic of manual systems, thus giving rise to primary books of accounts such as Cash Book, Bank Book, Purchase Book, and Sales Book for recording the immediate effect of a financial transaction.
In the normal course of business, a document is produced each time a transaction occurs. Sales and purchases usually have invoices or receipts. Deposit slips are produced when lodgements (deposits) are made to a bank account. Checks (spelled "cheques" in the UK and several other countries) are written to pay money out of the account. Bookkeeping first involves recording the details of all of these source documents into multi-column journals (also known as books of first entry or daybooks). For example, all credit sales are recorded in the sales journal; all cash payments are recorded in the cash payments journal. Each column in a journal normally corresponds to an account. In the single entry system, each transaction is recorded only once. Most individuals who balance their check-book each month are using such a system, and most personal-finance software follows this approach.
After a certain period, typically a month, each column in each journal is totalled to give a summary for that period. Using the rules of double-entry, these journal summaries are then transferred to their respective accounts in the ledger, or account book. For example, the entries in the Sales Journal are taken and a debit entry is made in each customer's account (showing that the customer now owes us money), and a credit entry might be made in the account for "Sale of class 2 widgets" (showing that this activity has generated revenue for us). This process of transferring summaries or individual transactions to the ledger is called posting. Once the posting process is complete, accounts kept using the "T" format undergo balancing, which is simply a process to arrive at the balance of the account.
As a partial check that the posting process was done correctly, a working document called an unadjusted trial balance is created. In its simplest form, this is a three-column list. Column One contains the names of those accounts in the ledger which have a non-zero balance. If an account has a debit balance, the balance amount is copied into Column Two (the debit column); if an account has a credit balance, the amount is copied into Column Three (the credit column). The debit column is then totalled, and then the credit column is totalled. The two totals must agree—which is not by chance—because under the double-entry rules, whenever there is a posting, the debits of the posting equal the credits of the posting. If the two totals do not agree, an error has been made, either in the journals or during the posting process. The error must be located and rectified, and the totals of the debit column and the credit column recalculated to check for agreement before any further processing can take place.
Once the accounts balance, the accountant makes a number of adjustments and changes the balance amounts of some of the accounts. These adjustments must still obey the double-entry rule: for example, the inventory account and asset account might be changed to bring them into line with the actual numbers counted during a stocktake. At the same time, the expense account associated with usage of inventory is adjusted by an equal and opposite amount. Other adjustments such as posting depreciation and prepayments are also done at this time. This results in a listing called the adjusted trial balance. It is the accounts in this list, and their corresponding debit or credit balances, that are used to prepare the financial statements.
Finally financial statements are drawn from the trial balance, which may include:
. the income statement, also known as the statement of financial results, profit and loss account, or P&L
. the balance sheet, also known as the statement of financial position
. the cash flow statement
. the Statement of changes in equity, also known as the statement of total recognised gains and losses
A budget is a financial plan for a defined period of time, usually a year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. Companies, governments, families and other organizations use it to expresses strategic plans of activities or events in measurable terms.
A budget is the sum of money allocated for a particular purpose and the summary of intended expenditures along with proposals for how to meet them. It may include a budget surplus, providing money for use at a future time, or a deficit in which expenses exceed income.
Personal budget from Wikipedia
A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.
Spreadsheet from Wikipedia
A spreadsheet is an interactive computer application for organization, analysis and storage of data in tabular form. Spreadsheets are developed as computerized simulations of paper accounting worksheets. The program operates on data entered in cells of a table. Each cell may contain either numeric or text data, or the results of formulas that automatically calculate and display a value based on the contents of other cells. A spreadsheet may also refer to one such electronic document.
Spreadsheet users can adjust any stored value and observe the effects on calculated values. This makes the spreadsheet useful for "what-if" analysis since many cases can be rapidly investigated without manual recalculation. Modern spreadsheet software can have multiple interacting sheets, and can display data either as text and numerals, or in graphical form.
Besides performing basic arithmetic and mathematical functions, modern spreadsheets provide built-in functions for common financial and statistical operations. Such calculations as net present value or standard deviation can be applied to tabular data with a pre-programmed function in a formula. Spreadsheet programs also provide conditional expressions, functions to convert between text and numbers, and functions that operate on strings of text.
Spreadsheets have replaced paper-based systems throughout the business world. Although they were first developed for accounting or bookkeeping tasks, they now are used extensively in any context where tabular lists are built, sorted, and shared.
LANPAR, available in 1969, was the first electronic spreadsheet on mainframe and time sharing computers. LANPAR was an acronym: LANguage for Programming Arrays at Random. VisiCalc was the first electronic spreadsheet on a microcomputer, and it helped turn the Apple II computer into a popular and widely used system. Lotus 1-2-3 was the leading spreadsheet when DOS was the dominant operating system. Excel now has the largest market share on the Windows and Macintosh platforms. A spreadsheet program is a standard feature of an office productivity suite; since the advent of web apps, office suites now also exist in web app form. Web based spreadsheets, such as Microsoft Excel Online or Google Sheets are a relatively new category.
Gnumeric is a spreadsheet program that is part of the GNOME Free Software Desktop Project. Gnumeric version 1.0 was released on 31 December 2001. Gnumeric is distributed as free software under the GNU GPL license; it is intended to replace other spreadsheet programs such as Microsoft Excel (proprietary). Gnumeric was created and developed by Miguel de Icaza, but he has since moved on to other projects. The maintainer As of 2002 was Jody Goldberg. Gnumeric releases were ported to Microsoft Windows until August 2014 (Last: 1.10.16 and 1.12.17). 
Gnumeric has the ability to import and export data in several file formats, including CSV, Microsoft Excel (write support for the more recent .xlsx format is incomplete), Microsoft Works spreadsheets (*.wks), HTML, LaTeX, Lotus 1-2-3, OpenDocument and Quattro Pro; its native format is the Gnumeric file format (.gnm or .gnumeric), an XML file compressed with gzip. It includes all of the spreadsheet functions of the North American edition of Microsoft Excel and many functions unique to Gnumeric. Pivot tables and Visual Basic for Applications macros are not yet supported.
Gnumeric's accuracy has helped it to establish a niche for statistical analysis and other scientific tasks. For improving the accuracy of Gnumeric, the developers are cooperating with the R Project.
Gnumeric has a different interface for the creation and editing of graphs from other spreadsheet software. For editing a graph, Gnumeric displays a window where all the elements of the graph are listed. Other spreadsheet programs typically require the user to select the individual elements of the graph in the graph itself in order to edit them.
International Financial Reporting Standards (IFRS)
The International Financial Reporting Standards, usually called the IFRS Standards, are standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. They are the rules to be followed by accountants to maintain books of accounts which are comparable, understandable, reliable and relevant as per the users internal or external. IFRS, with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized in terms of the historical cost paradigm. IAS 29 and IFRIC 7 are authorized in terms of the units of constant purchasing power paradigm.
IFRS began as an attempt to harmonize accounting across the European Union but the value of harmonization quickly made the concept attractive around the world. However, it has been debated whether or not de facto harmonization has occurred. Standards that were issued by IASC (the predecessor of IASB) are still within use today and go by the name International Accounting Standards (IAS), while standards issued by IASB are called IFRS. IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new International Accounting Standards Board (IASB) took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and Standing Interpretations Committee standards (SICs). The IASB has continued to develop standards calling the new standards "International Financial Reporting Standards".
In the absence of a Standard or an Interpretation that specifically applies to a transaction, management must use its judgement in developing and applying an accounting policy that results in information that is relevant and reliable. In making that judgement, IAS 8.11 requires management to consider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework.
Criticisms of IFRS are (1) that they are not being adopted in the US (see GAAP), (2) a number of criticisms from France and (3) that IAS 29 Financial Reporting in Hyperinflationary Economies had no positive effect at all during 6 years in Zimbabwe's hyperinflationary economy. The IASB offered responses to the first two criticisms, but has offered no response to the last criticism while IAS 29 was as of March 2014 being implemented in its original ineffective form in Venezuela and Belarus.
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