History of Accounting
The history of accounting is very ancient like thousands of years. But the history of accounting profession is new. Modern civilization is impossible without accounting.
The origins of accounting are generally attributed to the work of Luca Pacioli, and Italian Renaissance mathematician. The concept of accounting comes from his book. But it is considered the first book on accounting was Della Mercatura e del Mercante Perfetto written by Benedetto Cotrugli in 1458 and published in 1573.
Luca Pacioli: Luca Pacioli, recognized as The Father of accounting and bookeeping was born in Sansepolcro, Italy in 1445. He was a Franciscan mock. But he was famous as an Italian Renaissance mathematician. Pacioli was a close friend and tutor to Leonardo da Vinci and a contemporary of Christopher Columbus. Pacioli was died in 1517 at his birthplace.
The Book: Modern accounting is based on the book Summa de Arithmetica, Geometria, Proportioni et Proportionallta which means an overview of arithmetic, geometry and proportions. It was publish in 1494 in Venice. This book contains 36 chapters on bookkeeping. Present accounting concept comes from the chapter De Computis et Scripturis which means of reckoning and writings. In his text he described a system to ensure that financial information was recorded efficiently and accurately.
Modern accounting is developed through the following five stages:
- Accounting in the Primitive Age.
- Accounting in the Middle Ages.
- Accounting in the Pre-Industrial Revolution Age.
- Accounting from Industrial Revolution to Nineteenth Century.
- Accounting in the Twentieth Century and Present Time.
They are briefly discussed below:
(1) Accounting in the Primitive Age: The times before 476 year are known as primitive age of accounting. In this period accounting is limited upto counting. At that time the business activities were operated through barter system.
(2) Accounting in the Middle Age: The period from the year 476 to 1453 is known as the middle age of accounting. In this period business activities were expanded from one country to another country. At that time the business activities were operated through monetary system.
(3) Accounting Pre-Industrial Revolution Age: The period from the year 1454 to 1760 is known as the pre-industrial revolution of accounting. In this period some books on accounting written and published like Luca Pacioli’s Summa, Cotrugli’s Della etc.
(4) Accounting from Industrial Revolution to Nineteenth Century: The period from the year 1760 to the end of nineteenth century is known as post industrial period of accounting. In this period some branches of accounting like cost accounting is originated. In this period some accounting standards and institutions like the Institute of Accountants in Edinburgh is established. Also in this period, the three types of business concerns – proprietorship, partnership, and corporation were established.
(5) Accounting in the Twentieth Century and Present Time: After the year 1900 to date is known as modern accounting age. Within this period all types of branches of accounting like costing, management accounting, auditing, taxation, government accounting, socioeconomic accounting, human resource accounting etc are perfectly established. In recent years, electronic accounting like software, e-business, e-commerce, website etc are very popular to the users for easiness, cheapness, and fastness.