Lesson 1: What is accounting?
Accounting is more about 'accountability' than 'counting'.
Modern accounting was invented so that people with capital (wealth/assets) could have a rigorous way to calculate whether their capital was increasing (profits), or decreasing (losses), as a result of their business activities. As the separation between the 'provider of the capital' (originally the owner and later also financiers like banks) and the 'manager of the capital' (those employed in the business to make a profit for the owners) continued to grow, with the complexity of business structures the need for accountability became even greater. This, and the associated need of useful information for decision making (by both the managers and also the owners), lead to the need for a single system that all would use: accounting.
Modern accounting was invented so that people with capital (wealth/assets) could have a rigorous way to calculate whether their capital was increasing (profits), or decreasing (losses), as a result of their business activities. As the separation between the 'provider of the capital' (originally the owner and later also financiers like banks) and the 'manager of the capital' (those employed in the business to make a profit for the owners) continued to grow, with the complexity of business structures the need for accountability became even greater. This, and the associated need of useful information for decision making (by both the managers and also the owners), lead to the need for a single system that all would use: accounting.
Anne Kriel provides an overview of the accounting framework.
[Duration: 10:53]
[Duration: 10:53]
We further explore the topic, "What Is Accounting?"
[Duration 4:16]
[Duration 4:16]
JOE'S PIZZA:
And, just in case your students were thinking of going into the pizza business, here's a funny little video produced by our IT partners, Knowledge Foundry with some more info about Colour Accounting at the end... [1:33]
And, just in case your students were thinking of going into the pizza business, here's a funny little video produced by our IT partners, Knowledge Foundry with some more info about Colour Accounting at the end... [1:33]
Extenders
- What does it mean to ‘have an account’ with a business?
- Think of a service business. How would their Statement of Account compare?
- What do the numbers mean beside the words in the Detail column?
- By what date must this account be paid to avoid being late?
- What might happen if we are late paying the account?
- If we pay within 30 days, how much do we need to pay?
- What is the last day we can pay, and still claim the 5% discount?
- Why are Ace giving away money with the 5% discount?
- What if our outstanding balance goes higher than R35 000?
- Advanced: If this was your business, would you prefer people paid on invoice (the 'repayment clock' for each invoice starts when the invoice is issued) or on the issue of the statement? What if you were the customer?
ResourcesStudent Workbook - Lesson 1 [4.9MB]Download
In South Africa, the physical Student Workbook is part of the BaSIS Box. You can download the workbook with each lesson, or your teacher in South Africa can buy BaSIS Boxes including the Student Workbooks for the class.
In South Africa, the physical Student Workbook is part of the BaSIS Box. You can download the workbook with each lesson, or your teacher in South Africa can buy BaSIS Boxes including the Student Workbooks for the class.
If you download the Student Workbook lessons above, and don't have access to a colour printer, then you will need to add some colour manually to the Colour Accounting specific elements, as explained in the following video.
[Duration 2:51]
[Duration 2:51]