Asking that question of an accountant is like asking a farmer why we need rain.
The more important question is why do you think we need accounting?
I want to you to think about your everyday uses of accounting - using a debit card, arranging your student loan, getting paid for your work, paying your cell phone bill, using Pay Pal, selling something on EBay, subscribing to a magazine, buying your lunch, leasing a car, purchasing a song from iTunes. The commonality of these transactions is that every transaction requires some form of accounting.
So really, you already know a lot about accounting - you use it every day.
So, why is accounting important to you? Well, without accounting many of the transactions you complete everyday would become very difficult - for example, if we went back to the barter system, " to trade or exchange of goods or services without using money" we would most likely need a third party intermediary to oversee the barter transactions - just to instill a sense of fairness of trade for both parties. Unlike Peter Minuet deal in which $24 worth of beads, knives and kettles for Manhattan Island - we clearly note that Peter got the benefit of the bargain on that transaction!
Would you want to constantly be bartering for your everyday transactions - dragging your parcel of beads or whatever your trade is to Tim Horton's for your daily large double double? Doubtful - much easier to fork over a buck thirty-five in coins. The lack of transferability of bartering for goods, as you can see, is tiring, confusing and inefficient and never mind thinking how long the drive-Thu line would become As you see, your everyday commerce transactions would take a different spin without a common form of currency - money .
See this article on what is money - http://www.investopedia.com/articles/basics/03/061303.asp
Accounting is the backbone of the business financial world. We need accounting because it is the only way for the business to grow and flourish - just like the daisy!
Accounting dates back to medieval times - Italy is the location of our first recorded source of accounting entries, and the first published accounting work was in 1494 by a Venetian monk. Old eh?
Another interesting fact is that the knowledge and principles upon which the first accounting practices were established, have changed very little in many hundreds of years accounting has been in use. The concept of assets, liabilities and income and the need to reconcile these areas is still the basis for all accounting functions today.
As we begin this accounting course, do not lose sight that you are already pretty experienced with many accounting transactions - we might start to formalize some of the transactions in this course.
Many of you have already crunched your own budget numbers for this coming school year, and as in business some are better than others at budgets, so salute those that will not be eating Kraft Dinner come March!
Your Professor of Accounting
Dianne Davis
