Paper Topic:

financial accounting reprot

History of double entry bookkeeping

Born around 1445 , Bartolomes Pacioli the Franciscan friar while helping his friend calculate the bronze amount needed for a statue discovered the art of double entry bookkeeping . He is not originally the inventor of the system but he indeed became the first author to publish a feature on the system . This effective system passes a direct message to the owners , users , shareholders , reviewers and many more dependants on the financial information

This system is identified through owning two accounts with each having two columns for debit

and credit side . For every action there is a donor and the receiver , thus both parties must be mentioned and acknowledged (Sanella , 2010 . After all , they are the main concern for the action taking place

Mechanical process of double entry bookkeeping

The T accounts as the name suggests , take the form of capital letter T They show how the transaction has been recorded in a more understandable way . The left hand side is taken by debit entries while the right hand side is a response to credit effects . Debiting involves entering the amount of the item left column and if it an asset it will increase but it will decrease capital and liabilities (Knutson et al , 2005 Crediting will be done on the right column and its consequences include reducing an asset , increasing a liability and increasing the capital The assets represent the resources the company owns and their capability can be measured using them . While the liabilities are...

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