ACCF 111 NOTES
Chapter 1: The World of Accounting
1. What is Accounting?
• The systematic process of identifying, measuring,
recording, and reporting nancial information about an
entity's economic activities.
• It is the "international language of business."
2. Governing Rules: GAAP & IFRS
• GAAP (Generally Accepted Accounting Practice): The set
of rules, standards, and procedures for nancial
reporting in a speci c country.
• IFRS (International Financial Reporting Standards): The
global version of GAAP, developed to create a common
accounting language.
3. Historical Development
• Origins: Modern accounting began with double-entry
bookkeeping in 13th-14th century Italy.
• Key Figure: Luca Pacioli published the rst known book
on double-entry in 1494.
• Key In uences:
o Industrial Revolution: Led to Cost Accounting.
o Rise of Companies: Created a need for reporting to
shareholders (stewardship).
o Professional Bodies: Institutes like SAICA were formed
to regulate the profession and create standards.
4. Aim of Accounting
• To provide nancial information to help present and
future investors, lenders, and others make informed
decisions.
Chapter 1: The World of Accounting
1. What is Accounting?
• The systematic process of identifying, measuring,
recording, and reporting nancial information about an
entity's economic activities.
• It is the "international language of business."
2. Governing Rules: GAAP & IFRS
• GAAP (Generally Accepted Accounting Practice): The set
of rules, standards, and procedures for nancial
reporting in a speci c country.
• IFRS (International Financial Reporting Standards): The
global version of GAAP, developed to create a common
accounting language.
3. Historical Development
• Origins: Modern accounting began with double-entry
bookkeeping in 13th-14th century Italy.
• Key Figure: Luca Pacioli published the rst known book
on double-entry in 1494.
• Key In uences:
o Industrial Revolution: Led to Cost Accounting.
o Rise of Companies: Created a need for reporting to
shareholders (stewardship).
o Professional Bodies: Institutes like SAICA were formed
to regulate the profession and create standards.
4. Aim of Accounting
• To provide nancial information to help present and
future investors, lenders, and others make informed
decisions.
