Financial accounting, commonly known in daily verbatim as

'book keeping', is one of the oldest practices integral of

business management. Financial accounting is officially dated to

the medieval ages when one of the first banking houses and

groups gained importance towards the public and in commercial

fields. The first bankers wanted an organised approach towards

maintaining set references that would act as formally laid

records for them, to be referred in the future or present, and

were meant to keep in touch of the financial situation of the

business. However, historically accounting methods go back to

ancient times when prestigious records were required to be

maintained.

Financial accounting is so important that nearly every

management institute in the world compulsorily trains its

students about it, teaching core principles and why it is

important to develop a record keeping habit not just in the

industry but personally as well. When seen from a personal

point of view too, financial accounting can lend much support

to one's own finances. In our modern times, we see a number

of apps and software on mobiles and computers specifically

intended to maintain a record of our personal record. In its

conceptual entirety, maintaining personal finances itself

constitutes one of the practical forms of financial accounting.

In today's world, no business can exist without a set of

accounting system. A start-up with just four employees too

needs an accountant for the manager to be in touch with the

situation of his/her organisation. With finances and the economy

becoming so dynamic as seen never before, it is thus an

essential part on understanding accounting practices and why

they constitute an important part of business management.

However, accounting theory is no one-page study; it requires

much skills and know-how about all its concepts and definitions

for anyone to be called as a qualified accountant. In this book,

a brief explanation of accounting concepts is concerned, with

special emphasis on its history and key concepts. Since

accounting is more than just merely forming a table with

figures, a detailed explanation of all the basic and key terms

becomes vital. Through examples, an appropriate understanding

of accounting theory becomes even clearer for the amateurs

and those who would want to know more about financial

accounting without going much into technical details. Finally,

conclusion remarks will briefly outline the necessity of

maintaining financial records and how accounting theory is yet

another still-evolving concept. Since financial accounting

encompasses almost everything related to business management,

its importance in the corporate world as well as our personal

lives will also be outlined through practical examples and theory.