Know what accounting is and what accountants do

Make the difference between accounting and bookkeeping

Be able to understand the categories of accountants

Identify the users of accounting information

Study and Learn the Words:

English	English Equivalents	Romanian	Russian
to trace back	to describe how it developed	a-şi lua originea, a se dezvolta	развиваться
to be concerned with	to give attention to	a se ocupa de	заботиться
accurate (adj)	precise	cu precizie	точный
up-to-date	latest, the newest	modern, original	современный
to chalk up	to gain
rigorous (adj)	strict	riguros	строгий, неукоснительный
accounts receivable	debts owed to our organization	creanţe	счета к получению, дебиторская задолженность
to commit to	you decide definitely that you will do it	a se angaja	взять на себя обязательства
payroll (n)	a list of people employed by a company showing the amount of money to be paid to each of them	stat de plată	платежная ведомость
pertaining (adj)	connected to	legat de	связанный
auditing	verification of authenticity of financial statements by an independent professional accountant	audit	аудит
scholar (n)	a learned or erudite person esp. one who has profound knowledge of a particular subject	cărturar	учёный
double-entry accounting	simultaneous production of a debit and a credit from processing a transaction	contabilitatea dublei înregistrări	система бухгалтерского учета по методу двойной записи
clay tablets		tabliţe din lut	глиняные таблички
treatise	a formal and systematic exposion in writing of the principles of a subject	tratat ştiinţific	научный трактат
handicraft	handmade things	lucru manual	ремесло
overheads	indirect costs	cheltuieli indirecte	накладные расходы

Accounting is the process of systematically collecting, analyzing, and reporting financial information.

The Evolution of Accounting

“To understand accounting today and predict it tomorrow, one must know the history of accounting”

Fra Luca Paciolli

The history of accounting is as old as civilization, key to important phases of history, among the most important professions in economics and business. Accountants participated in the development of cities, trade and the concept of wealth and numbers. They invented writing and took part in the development of money and banking, invented double-entry bookkeeping, helped develop capital markets and are central to the information revolution that is transforming the global economy. It can be argued that as a profession accounting is very young; however, as a service activity it dates back several thousand years. Among the earliest records are those of Egyptians and Babylonians (from approx. 3000 B.C.), who recorded on clay tablets such transactions as the payment of wages and taxes. As early as 1494, a famous Italian Franciscan monk, Fra Luca Paciolli, mathematician, scholar and philosopher published a treatise containing the essential elements of double-entry accounting system that is still in use today. His important work was entitled “Summa de Aritmetica, Geometrica, Proportioni et Proportionalita”, which contained a detailed description of accounting as practiced at that age. This book became the most widely read book on mathematics in Italy and firmly established Paciolli “the Father of Accounting”.

During the Industrial revolution technological advances not only provided new machinery but required new types of expenditures as well. Cost accounting systems had to be developed to analyse and control the financial operations of those manufacturing processes.

Modern accounting in the United States can be traced back to the establishment of the American Institute of Certified Public Accountants (AICPA) in 1887. By the early 1900s, accounting instruction was offered (but was optional) at many colleges and universities. Today, accounting courses are required for virtually every type of business degree.

Accounting or Bookkeeping

Many people confuse accounting with bookkeeping, but there are important differences between the two. Accounting deals with the entire system for providing accurate and up-to-date financial information—from design of the system through its operation to interpretation of information that is obtained. To become an accountant, an individual must undergo years of training and chalk up a great deal of practical experience.

Bookkeeping, on the other hand, is the routine, day-to-day record keeping that is a necessary part of accounting. Bookkeepers are responsible for obtaining the financial data that the accounting system processes. Accounting system cannot operate without good, accurate bookkeeping but a bookkeeper can generally be trained within a year or so.