Modern Accounting

Accounting has been around since agricultural trade grew an importance, which was not long before business people began to develop and use the calculation system of accounting (Fletcher, 2008). Accounting is also known as the language of business. It is the language of all things financial (Beattie, 2008). With the sole purpose of accurately calculating and keep records of monetary exchanges (Fletcher, 2008).

Accounting is defined as the system of recording, verifying, and the reporting of the value of assets, liabilities, income, and expenses in the book of account (ledger) to which debit and credit entries are recognized, recorded, and posted to record changes in value (Collins English Dictionary, 2012).

Modern accounting is traced back to the work of Luca Pacioli, an Italian monk who in 1494 A.D published the double-entry system (which continues to be the fundamental structure for contemporary accounting) (Gage, 2001). This scientific system was designed so well that even modern accounting principles are based on it. Companies would maintain their records manually in books (that’s how bookkeeping came about). This method was long, prone to error by human and a burdensome. Until later when the computerized accounting program was introduced, which created a faster, more organized method of maintain books.

Economists developed the practice of accounting as a way of organizing their records of agricultural trade and further develop the early fiscal system of accounting. Through the years the practice of accounting has certainly became more sophisticated, but the foundation and motives remain the same.

As more and more currencies became available, tradesmen and merchants began to build their wealth and calling for bookkeepers to assist in keeping, their records organized. They would do so by using the single column entry, which is more commonly similar to how many of track our checkbooks. Traditionally, accounting was process manually on...