A Brief History of Accounting
Accounting is considered the oldest profession in the world.
It dates back thousands of years!
A 76,000 year old plaque was found in South Africa which had engravings that some researchers say are the earliest records of accounting.
In Mesopotamia 7000 years ago the people used primitive accounting methods to record and keep track of their crops and herds.
They recored everything: Cash Commodities Tansactions Sales Even their beer and wine storage!
Ancient Romans loved Accounting
Ancient Romans recorded all that in scrolls
Although their system was very advanced for their era this type of accounting was Single-Entry Bookkeeping only
When Medieval Europe moved to a monetary economy in the 13th Century merchants began to use bookkeeping to oversee multiple transactions financed by bank loans
The problem was that all these transactions were happening simultaneously so they needed a new method of bookkeeping to keep track of them
Double-Entry Bookkeeping was born!
This meant that there was a Debit and a Credit entry for each transaction
The origins of the words Debit and Credit go back to the days of single-entry bookkeeping where the main goal was to keep account of amounts owed by others (debit) and amounts owed to others (credit)
Debit is abbreviated to Dr because it comes from the Latin "Debere" which means : to owe/that which is owing
Credit is abbreviated to Cr because it comes from the Latin "Credere" which means: to trust/to believe
The earliest existant evidence of full double-entry bookkeeping is the Farolfi ledger of 1300
Giovanno Farolfi & Company were a firm of Florentine merchants and moneylenders
The earliest book on this "modern" type of accounting was written in Venice, 1494, by Luca Pacioli
Luca Pacioli wrote
"Review of Arithmetic, Geometry, Ratio and Proportion"
"Summa de Arithmetica, Geometria, Proportioni et Proportionalità"
primarily for merchants, who used it for reference and to educate their sons
it included a 27 page section on double-entry bookkeeping
It is widely believed to be the forerunner of modern bookkeeping practice
The modern profession of the chartered accountant and the first public accountant societies originated in Scotland in the mid-nineteenth century
Overall, accounting hasn't changed much since double-entry bookkeeping was invented!
Created by: Mary Barrios Liv Kim Yumi Noona
Music: Edward Maya ft Devas - Stereo Love (Violin Version)