History of Accounting
HISTORY OF ACCOUNTING
Primitive Accounting
Traced as far as 8500 BC in Mesopotamia through the use of clay like: a. Record for paid wages b. Record purposes, as general
Pyramids in Egypt, for the costs of structures
Other places like China, Babylon, and Greece
Middle Ages
More formal account-keeping methods were developed by the merchants and banks.
Double-entry records first appeared in Genoa in 1340 AD.
First accounting book was written by Contrugli in Naples
Summa de Arithmetica, Geometria, Proportionis, et Proportionalita by Fr. Luca Pacioli about double-entry bookkeeping. (1494)
Active flow of trade in and out of the ports of Europe
Industrial Revolution & Corporate Organization (19th Century)
Emergence of complex business
Problem of costing for a large volume of products
Special field of accounting emerged to meet this need for the analysis of the various costs.
Information Age
Clerical tasks that were done manually can be done automatically with speed, consistency, precision, and reliability.
Emergence of accounting applications to suit the businesses’ various needs. (Quickbooks, Peachtree, MYOB, JDE, Navision, SAP, Oracle, etc.)
Limitation: professional judgment
ACCOUNTING
“...the art of recording, classifying, and summarizing in a significant manner, and in terms of money, transactions, and events, which are, in part at least, of a financial character, and interpreting the results thereof.” - AICPA
“...process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by the users of the information.” - AAA
Current Definition of Accounting:
Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.
Phases of Accounting
1. Recording- also “journalizing”. It involves systematic and chronological recording of business
Primitive Accounting
Traced as far as 8500 BC in Mesopotamia through the use of clay like: a. Record for paid wages b. Record purposes, as general
Pyramids in Egypt, for the costs of structures
Other places like China, Babylon, and Greece
Middle Ages
More formal account-keeping methods were developed by the merchants and banks.
Double-entry records first appeared in Genoa in 1340 AD.
First accounting book was written by Contrugli in Naples
Summa de Arithmetica, Geometria, Proportionis, et Proportionalita by Fr. Luca Pacioli about double-entry bookkeeping. (1494)
Active flow of trade in and out of the ports of Europe
Industrial Revolution & Corporate Organization (19th Century)
Emergence of complex business
Problem of costing for a large volume of products
Special field of accounting emerged to meet this need for the analysis of the various costs.
Information Age
Clerical tasks that were done manually can be done automatically with speed, consistency, precision, and reliability.
Emergence of accounting applications to suit the businesses’ various needs. (Quickbooks, Peachtree, MYOB, JDE, Navision, SAP, Oracle, etc.)
Limitation: professional judgment
ACCOUNTING
“...the art of recording, classifying, and summarizing in a significant manner, and in terms of money, transactions, and events, which are, in part at least, of a financial character, and interpreting the results thereof.” - AICPA
“...process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by the users of the information.” - AAA
Current Definition of Accounting:
Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.
Phases of Accounting
1. Recording- also “journalizing”. It involves systematic and chronological recording of business