Facts About The History Of Accounting

Don't be surprised to discover that accounting's roots dates back to the very earliest days of human civilization

. Oh yes, I'm talking about Ancient Egypt, and the Sumerians in Mesopotamia - the very beginning! Far back, scientists have discovered surprisingly detailed and accurate records of the values and quantities of products being bought and sold. Even modern Christian bible mentions basic accounting (The book of Matthew, in the Parable of the Talents), and in the Islamic Quran.

The book Hisba, written in the 12th century by Ibn Taymiyyah, detailed systems of accounting that were practiced by Muslims in as early as the mid seventh century A.D.. (Actually, Hisba literally translates into 'calculation', or 'verification') It's interesting to note that these practices weren't invented by the Muslims, but were heavily influenced by the countries that they interacted with most - particularly, the Persian and the Roman civilizations.

The author provides us with a great amount of detail into the extremely complex government accounting system, the Divan of Umar. You can actually find information about the Divan of Umar that's recorded by a number of historians - it was used in the Middle East until the fall of the Ottamon Empire.

Never really thought about accounting going back this far, did you? As mathematics developed during the Renaissance, so did accounting. As you may remember from high school history, mathematics had a period of rapid development in the late 15th century, and it provide to the Hindu-Arabic numerals becoming much more widely used. That, and the introduction of algebra, gave accounting a huge boost in many different ways.

Birth of Accounting

Have you ever heard of Luca Pacioli, who is also known as Friar Luca dal Borgo? Many people haven't, but he's widely credited as the father of accounting. Why? In 1494, Pacioli wrote a text book that, very literally, took everything about then-modern accounting and put it in one place. A compilation of everything he knew, it was the very first printed description of the accounting system the Venetian merchants used, which a very similar accounting cycle as one has used today. A double-entry system, it also described different styles of ledgers, as well as the sections of assets, liabilities, income, capital, and expenses. All this in 1494 - and this entire still found on your modern accounting balance sheet.

Evolution into Modern Accounting

Businesses changed from something small and home owned to something larger, the capital markets grew with it. Now, success was subject to an accurate financial records and a good track record of financial responsibility. Such, the modern accounting was born.

A vital part of day to day business practices, the modern accounting is a vital part of our economy. The history of accounting has shaped their role to be truly amazing.

by: Inessa Khaykin

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