Accounting is at least the second oldest profession in the world. But while earlier professionals rapidly got to grips with basic techniques and even introduced refinements, it is remarkable that generations of tax collectors and merchants staggered on for thousands of years before finding a satisfactory general method of keeping a record of their affairs.

The first text in this unit attempts to answer the question ‘What is accounting?' Is it a subject only concerned with past business and economic activity or does it have an important function for future actions? Text 1.2 looks at three concepts, assets, equity and liability, which are basic to the practice of accountancy.