History of Accounting

THE HISTORY OF ACCOUNTING

Ancient accounting methods emerged thousands of years ago - perhaps more than 10,000 years ago - in what we now regard as the Middle East region. Sumerians in Mesopotamia, Babylonians and the ancient Egyptians recognized the need for counting and measuring the results of labor and effort. As these ancient societies built more complex civilizations, the need to conduct simple arithmetic, writing and trade emerged. These ingredients eventually led to the formations of currency, capital, private property arrangements and systems for commerce and public management. 

Each civilization had an important part to play in the history of how the world came to be, with accounting being the forefront of any trade. While the Arab mathematicians could be credited to inventing Arabic numerals, the Italians take the claim for stressing the importance of double entry book keeping and the Indians were the first to introduce the concept of zero.

REASONS FOR THE INTRODUCTION OF ACCOUNTING

The main need for accounting grew from the expansion of commerce and business in the first millennium BC. This also cemented the importance for the role of an accountant.

During the 13th century, Medieval Europe moved to a monetary economy and the most important breakthrough was the invention of double entry book keeping.

ACCOUNTING IN ANCIENT EGYPT

The concept of money took a long time to come in to existence. Instead, the people of ancient Egypt used jewels, goods and livestock to pay for services. The ancient Egyptians had a complex system of storing commodities in warehouses. Hence, they came up with a specialized system to keep track of the inventories. In all the transaction of the exchange of goods, the importance of the scribe was high. The scribes kept track of the goods that were consumed and another set of scribes kept track of the outward movement of goods. Another set of scribes kept track of the records.

ROMAN ACCOUNTING

The Greeks...