Marketing 3115

Etymology[edit]

Both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century.[12] In Middle English (used roughly between the 12th and the late 15th century) the verb "to account" had the form accounten, which was derived from the Old French word aconter,[13] which is in turn related to the Vulgar Latin word computare, meaning "to reckon". The base of computare is putare, which "variously meant to prune, to purify, to correct an account, hence, to count or calculate, as well as to think."[13]

The word "accountant" is derived from the French word compter, which is also derived from the Latin word computare. The word was formerly written in English as "accomptant", but in process of time the word, which was always pronounced by dropping the "p", became gradually changed both in pronunciation and in orthography to its present form.[14]

Accounting and accountancy[edit]

Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis, verification and reporting of such records and "the principles and procedures of accounting"; it also refers to the job of being an accountant.[15][16][17]

Accountancy refers to the occupation or profession of an accountant,[18][19][20] particularly in British English.[15][16]

Accounting affects the economy[edit]

Although financial accounting produces past-oriented reports, it is based on generally accepted accounting principles and generally accepted accounting practices compliant with International Financial Reporting Standards/US GAAP. In order to prepare the financial accounts/reports an entity has to comply with these GAAPs and gaaps. Which of these accounting practices and principles the board of directors choose at the start of the financial period and whatever changes in these generally accepted accounting principles and practices are implemented during the...