History and development of accounting

The rising public status of accountants helped to transform accounting into a profession, first in the United Kingdom and then in the United States. Inthirty-one accountants joined together to create the American Association of Public Accountants. The first standardized test for accountants was given a decade later, and the first CPAs were licensed in

History and development of accounting

Ancient history[ edit ] Globular envelope known as a Bulla with a cluster of accountancy tokens, Uruk periodB. Louvre Museum Early development of accounting[ edit ] See also: History of mathematicsHistory of writingand History of money Accounting records dating back more than 7, years have been found in Mesopotamia[11] and documents from ancient Mesopotamia show lists of expendituresand goods received and traded.

In particular, there is evidence that a key step in the development of counting—the transition from concrete to abstract counting—was related to the early development of accounting and money and took place in Mesopotamia [1] Other early accounting records were also found in the ruins of ancient BabylonAssyria and Sumeriawhich date back more than 7, years.

The people of that time relied on primitive accounting methods to record the growth of crops and herds. Because there was a natural season to farming and herding, it was easy to count and determine if a surplus had been gained after the crops had been harvested or the young animals weaned.

In Godin Tepe's findings, the scripts only contained tables with figures, while in Tepe Yahya's findings, the scripts also contained graphical representations.

The Phoenicians invented a phonetic alphabet "probably for bookkeeping purposes", based on the Egyptian hieratic script, and there is evidence that an individual in ancient Egypt held the title "comptroller of the scribes".

There is also evidence for an early form of accounting in the Old Testament ; for example the Book of Exodus describes Moses engaging Ithamar to account for the materials that had been contributed towards the building of the tabernacle. The inscription was an account to the Roman people of the Emperor Augustus ' stewardship, and listed and quantified his public expenditure, including distributions to the people, grants of land or money to army veterans, subsidies to the aerarium treasurybuilding of temples, religious offerings, and expenditures on theatrical shows and gladiatorial games, covering a period of about forty years.

History and development of accounting

The scope of the accounting information at the emperor's disposal suggests that its purpose encompassed planning and decision-making. The closeness of this information to the executive authority of the emperor is attested by Tacitus ' statement that it was written out by Augustus himself.

An account of small cash sums received over a few days at the fort of Vindolanda circa AD shows that the fort could compute revenues in cash on a daily basis, perhaps from sales of surplus supplies or goods manufactured in the camp, items dispensed to slaves such as cervesa beer and clavi caligares nails for bootsas well as commodities bought by individual soldiers.

The basic needs of the fort were met by a mixture of direct productionpurchase and requisition ; in one letter, a request for money to buy 5, modii measures of braces a cereal used in brewing shows that the fort bought provisions for a considerable number of people.

Accounting Basics: History Of Accounting

The bulk of the documents relate to the running of a large, private estate [15] is named after Heroninos because he was phrontistes Koine Greek: This information was then summarized as pieces of papyrus scroll into one big yearly account for each particular sub-division of the estate.

Entries were arranged by sector, with cash expenses and gains extrapolated from all the different sectors. Accounts of this kind gave the owner the opportunity to take better economic decisions because the information was purposefully selected and arranged.

Luca Pacioli and Double-entry bookkeeping system When medieval Europe moved towards a monetary economy in the 13th century, sedentary merchants depended on bookkeeping to oversee multiple simultaneous transactions financed by bank loans.

One important breakthrough took place around that time: Debit in Latin means "he owes" and credit in Latin means "he trusts". Treasurer 's accounts of the city of Genoa in The Messari accounts contain debits and credits journalised in a bilateral form and carry forward balances from the preceding year, and therefore enjoy general recognition as a double-entry system.

His manuscript was first published in It included a page treatise on bookkeeping, "Particularis de Computis et Scripturis" Latin: Pacioli wrote primarily for, and sold mainly to, merchants who used the book as a reference text, as a source of pleasure from the mathematical puzzles it contained, and to aid the education of their sons.

His work represents the first known printed treatise on bookkeeping; and it is widely believed[ by whom? In Summa de arithmetica, Pacioli introduced symbols for plus and minus for the first time in a printed book, symbols which became standard notation in Italian Renaissance mathematics.

Accounting Introduction and History | Wyzant Resources

Summa de arithmetica was also the first known book printed in Italy to contain algebra. Its regular use provides the merchant with continued information about his business, and allows him to evaluate how things are going and to act accordingly.

Pacioli recommends the Venetian method of double-entry bookkeeping above all others. Three major books of account are at the direct basis of this system: It also enabled merchants to audit their own books and to ensure that the entries in the accounting records made by their bookkeepers complied with the method he described.

Without such a system, all merchants who did not maintain their own records were at greater risk of theft by their employees and agents: Financial accounting and Management accounting The development of joint-stock companies especially from about built wider audiences for accounting information, as investors without first-hand knowledge of their operations relied on accounts to provide the requisite information.

Two concepts have formed the current state of the accountancy profession. Firstly, the development of the double-entry book-keeping system in the fourteenth and fifteenth century and secondly, accountancy professionalization which was created in the nineteenth and twentieth centuries.Historical Development of Accounting by Alexis Kindig - Updated September 26, Accounting is the system of recording, classifying and summarizing financial information in such a way that users of the information can make economic decisions based upon it.

History and development of accounting

Accounting is the system of recording, classifying and summarizing financial information in such a way that users of the information can make economic decisions based upon it. Accounting began as a simple system of clay tokens to keep track of goods and animals, but has developed throughout history into a .

15 Balogun Akinyemi et al.: History and Development of Accounting in Perspective Intellectual: The study of accounting history helps us to understand our past.

And gives us an appreciation of how our current practices and problems came into being. Every time I teach accounting theory, the students asked me why they need to study the historical perspective in the development of accounting standards.

The Emergent Stage (Primitive to 1494)

15 Balogun Akinyemi et al.: History and Development of Accounting in Perspective Intellectual: The study of accounting history helps us to understand our past.

And gives us an appreciation of how our current practices and problems came into being. History and Development of Accounting Standards Essay Accounting has been around since the beginning of civilization. ¡§Accountants participated in the development of cities, trade, and the concepts of wealth and numbers.¡¨ (Giroux) The importance of accounting cannot be overemphasized.

History of Accounting (Business Reference Services, Library of Congress)