Symbolic signification

Ever wondered why the two sides of a coin should be so peculiarly named? It seems that these terms have a symbolic signification and important relevance. Just let your imagination run a bit, and you'll realise that, heads could be symbolic of somebody coming, and if true, tails would imply somebody going. Isn't that the basic activity of money? Money comes and money goes. The very purpose for naming the two face's of money as such, was most probably, to call the attention of people to these two aspects of money and make note of it. Wise men understood, practiced and prospered. They wrote and recorded coming as well as going of money, and so were able to manage money coming, and regulate or restrict it's going. That resulted in savings, which could be further, better utilized. Those who did not find the significance relevant, are still playing heads or tails.

That, in all probability, was the birth of accountancy. The wise men who made a count of money coming and going were, and still are, called a_count_tants. They not only kept a_count of money but also of goods and services received and given. Since money, goods and services do not come and go on their own, but are given or received, the focus was towards recording the giving and receiving aspects of money, goods and services.

You will have noticed, that this giving or receiving activity has a reciprocal effect. Giving results in receiving and receiving in giving. One can call it exchange. During the barter age, goods and services were exchanged, one for the other. Today goods and services are exchanged for money. If you render a service or give a product, you receive money and when money is given, you may expect to receive a product or service. These activities are called transactions.

Transactions are recorded for various purposes. Basic is to know how much money and products we own at a particular point in time, that is, our financial status. It also helps regulate our spending. Such data, when collected over a period of time, helps us analyse both, the giving and receiving activity, to improve our skills in managing money. For instance, if you curb spending, there will be savings which can be converted into earnings, by investing the same in bank deposits or elsewhere.

Recording transactions is the first step in learning the subject accountancy. In the beginning it seems like a child's play. Once you delve in, it gives an illusion of being difficult and complex. It might also induce a feeling of being brain damaging and tempt you to dump the subject. Actually, it is very simple, once you get to understand the systematic logic behind the method.


It is a simple three step process. First the transactions are written or recorded in a systematic method, then they are analyzed and lastly statements are prepared to provide a snapshot of the financial status of an individual, business or non-business entity. The next post shall contain the method applied to write or record transactions.