, PhD, Dr, Lecturer, Coventry University, UK
, Washington, New Jersey, USA
Accounting is an integral part of the financial and economic activity of economic entities, regardless of the type of activity and industry in which the enterprise operates. This paper summarizes the arguments and counterarguments in the scientific discussion regarding the nature of accounts in accounting practice. The purpose of the study is to deepen the analysis of European financial accounting practices, in particular in the context of the use of methodological support for the classification of the nature of accounts. Particular emphasis is placed on the evolution of accounting practices: an analysis of the major evolutionary stages that have occurred in different historical periods in accordance with the social needs of society and the economic and financial consequences of such transformational changes. The systematization of literary sources on the subject made it possible to identify three key stages of the evolutionary development of accounting and the essential nature of accounts, in particular: 1) the prerequisites for the emergence of financial and accounting, confirmed by a written accounting record dated 1494; 2) implementation of business continuity accounting based on the use of adjusting records and in-depth study of the nature and nature of accounts; 3) substantiation of the practical implementation of the triple record based on the implementation of blockchain technology. Based on the theoretical studies, the author substantiates the need to use in accounting practice a three-dimensional method of accounting by economic entities, which will more accurately reflect the financial transactions carried out by the company and avoid possible economic mistakes. The study postulates the need to integrate the third book within the accounting system. Summarizing, the author substantiates the need to develop in the future convergent methods of balancing the dual accounting system and maintaining accounts with the third book.
Keywords: financial and economic activity, financial reporting, accounting, double-entry, evolutionary development.
JEL Classification: A200, M400, M410, N800.
Cite as: Faccia, A., Mosco, D. (2019). Understanding the Nature of Accounts Using Comprehensive Tools to Understand Financial Statements. Financial Markets, Institutions and Risks, 3(3), 18-27. http://doi.org/10.21272/fmir.3(3).18-27.2019.
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