In some ways accounting is a process used for centuries. Luca Pacioli is often named when referring to the history and development of accounting.
Although accounting has developed a lot over the last few centuries, many of the principles used now date back to the fifteenth century when the double-entry method of accounting was first introduced. Accounting is a necessary part of every type of business and has been used in different ways over the centuries.
Mesopotamia and Egypt
In ancient Mesopotamia, around the year 2000 BC, a form of accounting was also used. A Mesopotamian Scribe used clay to form a way of writing contracts and holding people accountable for their debts.
In ancient Egypt a form of accounting was also used. Although the double-entry system was not yet designed, Egyptians kept precise records of all of their business dealings.
Oldest Surviving Accounting Record
The oldest accounting record found in the English language is called the Pipe Roll or “Great Roll of the Exchequer.” This ancient document dates back to around 1100 AD and provides a detailed description of rents, fines, and all taxes due to the King of England.
This document proves that accounting was part of the process used in maintaining records. Although the accounting was recorded differently than now, it was their system of keeping track of money paid and received.
Luca Pacioli was a mathematician born in 1445 in Sansepolcro, Tuscany. He is known to this day as the, “Father of Accounting,” based on the description he wrote of the double-entry accounting method. He published a book in 1494 titled, “The Collected Knowledge of Arithmetic, Geometry, Proportion, and Proportionality.”
In this book, one section was devoted to what is known today as the double-entry accounting method. Although he did not call it this, this method is outlined in detail in his book and this system is what is still currently used.
During the period of the Renaissance, the fourteenth through sixteenth centuries, the birth of accounting took place. This was the period in which the double-entry system was first designed and businesses began integrating their records with it. Businesses started getting larger and this system proved to work best.
Today in present times, accounting is used worldwide in various ways for all types of businesses. The double-entry system is widely used as a general concept in accounting. Businesses must use accounting to track their transactions of their company. Without accounting principles, businesses would have a horrible time trying to keep track of their records. Through the double-entry system, accounting records are easily maintained.