History Of Double Entry Accounting System
Somewhere between 10000 to 15000 years ago, communities learnt to cooperate with each other in a way that gave them access to a wider range of resources. Trade was no longer limited to those who had goods that were valuable to each other allowing people to benefit from the fruits of many other types of labor. For this to work, they needed something to symbolize the exchange of resources, something offering a common measure of value. Early money came in a variety of formats, from feathers and Vodka, to cow dungs and grains. Coins did not emerge until between 500 to 700 BC. Both currency and accounting began ''concrete counting'' which means counting being object-specific.
As long as the civilizations have been engaging in trade or organized system of Govt., methods of record keeping, Accounting and Accounting tools have been in use. Some of the earliest known writings discovered by Archaeologists are ancient tax records on clay tablets from Egypt and Mesopotamia (ancient name of Iraq) dating back as early as 3300 to 2000 BCE ( Before the
Common Era - Christianity). Historians hypothesize that the primary reason for the development
of writing systems came out of a need to record trade and business transactions.
When medieval Europe moved towards a monetary economy in 13th century, merchants depended on bookkeeping to oversee multiple simultaneous transactions financed by banks In 1458, Benedetto Cotrugli invented the Double entry accounting system which revolutionzed Accounting. Double entry accounting system is defined as any bookkeeping system that involves a Debit and/or Credit entry for transactions. Italian mathematician Franciscan Pacioli, who invented a system of record keeping that used a Memorandum, Journal and Ledger wrote many books on accounting.
One chapter of his book, (Details of Calculation and Recording) on the topic of record keeping and Double entry accounting became the reference text and teaching tool on those subjects for the next several hundred years. The chapter educated readers about the use of Journal and Ledgers, Accounting for Assets, liabilities, Receivables, Capital, Inventories, Income and Expenses, keeping a Balance Sheet and an income statement.
CHARTERED ACCOUNTANTS
The first professional organization for Accountants was established in Scotland in 1854 starting
with Edinburgh Society of Accountants and Glasgow Institute of Accountants and Actuaries. These organization each were granted a royal charter. Members could call themselves as Chartered Accountants. As companies developed, demand for reliable Accountants shot up and the profession rapidly become part of the Business and Financial system.
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As long as the civilizations have been engaging in trade or organized system of Govt., methods of record keeping, Accounting and Accounting tools have been in use. Some of the earliest known writings discovered by Archaeologists are ancient tax records on clay tablets from Egypt and Mesopotamia (ancient name of Iraq) dating back as early as 3300 to 2000 BCE ( Before the
Common Era - Christianity). Historians hypothesize that the primary reason for the development
of writing systems came out of a need to record trade and business transactions.
When medieval Europe moved towards a monetary economy in 13th century, merchants depended on bookkeeping to oversee multiple simultaneous transactions financed by banks In 1458, Benedetto Cotrugli invented the Double entry accounting system which revolutionzed Accounting. Double entry accounting system is defined as any bookkeeping system that involves a Debit and/or Credit entry for transactions. Italian mathematician Franciscan Pacioli, who invented a system of record keeping that used a Memorandum, Journal and Ledger wrote many books on accounting.
One chapter of his book, (Details of Calculation and Recording) on the topic of record keeping and Double entry accounting became the reference text and teaching tool on those subjects for the next several hundred years. The chapter educated readers about the use of Journal and Ledgers, Accounting for Assets, liabilities, Receivables, Capital, Inventories, Income and Expenses, keeping a Balance Sheet and an income statement.
CHARTERED ACCOUNTANTS
The first professional organization for Accountants was established in Scotland in 1854 starting
with Edinburgh Society of Accountants and Glasgow Institute of Accountants and Actuaries. These organization each were granted a royal charter. Members could call themselves as Chartered Accountants. As companies developed, demand for reliable Accountants shot up and the profession rapidly become part of the Business and Financial system.
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