Photoacoustic imaging (PAI) is emerging as a potentially powerful imaging tool with multiple applications. Image reconstruction for PAI has been relatively limited because of limited or no modeling of light delivery to deep tissues. This work demonstrates a numerical approach to quantitative photoacoustic image reconstruction that minimizes depth and spectrally derived artifacts. We present the first time-domain quantitative photoacoustic image reconstruction algorithm that models optical sources through acoustic data to create quantitative images of absorption coefficients. We demonstrate quantitative accuracy of less than 5% error in large 3 cm diameter 2D geometries with multiple targets and within 22% error in the largest size quantitative photoacoustic studies to date (6cm diameter). We extend the algorithm to spectral data, reconstructing 6 varying chromophores to within 17% of the true values. This quantitiative PA tomography method was able to improve considerably on filtered-back projection from the standpoint of image quality, absolute, and relative quantification in all our simulation geometries. We characterize the effects of time step size, initial guess, and source configuration on final accuracy. This work could help to generate accurate quantitative images from both endogenous absorbers and exogenous photoacoustic dyes in both preclinical and clinical work, thereby increasing the information content obtained especially from deep-tissue photoacoustic imaging studies. Hahn, and A. G. Yodh, "In vivo reflectance measurement of optical properties, blood oxygenation and motexafin lutetium uptake in canine large bowels, kidneys and prostates," Phys. Med. Biol. 47(6), 857-873 (2002)