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Financial Accounting Essay

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The accounting system we use today started in Venice in renaissance period over 520 years ago. The trade business increased hugely during this time and all the financial recordings had to be written down to help people see how their business is doing. During that time in 1494 the first book about was published in accounting by Luca Paciolli and was called “The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality”. He was called “The father of Accounting” and most of his described principles have been used up until this day.
The same recordings of business are still being used today to keep a track of company’s profit or loss, assets, liabilities and owner’s equity for a given period. This information is very important, because it is a law in Ireland to keep your accounts up to date and record everything that comes in and out of business. It helps if the company becomes insolvent. Just by looking at business accounts it is possible to say where and when it all went wrong. Accounting must represent true and fair view of business accounts and there are certain concepts and conventions to make sure that information is accurate and consistent.
The 4 fundamental concepts are:
1. Going concern. This is solvent, currently operating business that is expected to continue operating in foreseeable future. At that point all liabilities and assets are recorded at their historical cost at the time when it was acquired even though its value might change in the future. When the assets are bought, it is assumed that company bought it to increase their income and it will continue to use it for their benefit. The assumption is made that they do not intend to resell it and they will fully use it.
2. Prudence. This occurs ...


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...statements
http://basiccollegeaccounting.com/main-qualitative-characteristics-of-financial-statement/
http://www.bized.co.uk/learn/accounting/infosystems/bait/work05.htm
http://www.businessdictionary.com/definition/accounting-concepts.html?q=accounting%20concepts>
http://www.duncanwil.co.uk/concepts.htm
http://www.helium.com/items/1713540-accruals
http://www.helium.com/items/1758567-qualitative-characteristics-of-financial-statements
http://www.iasplus.com/standard/ias01.htm
http://www.iasplus.com/standard/standard.htm
http://knol.google.com/k/nowmaster-accounting/where-did-accounting-start/y2cary3n6mng/23#
http://www.odce.ie/en/annual-returns.aspx
http://www.personal-development.com/chuck/prudence.htm
http://www.referenceforbusiness.com/encyclopedia/For-Gol/Going-Concern.html
http://tutor2u.net/business/accounts/accounting_conventions_concepts.htm



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