History of Accounting Development

Posted by Imam Larh on Saturday, 14 April 2018

Luca Pacioli
Source: www.lucapacioli.com
History of Accounting Development

From the above article contained the main purpose of accounting is to produce or present economic information (economic information) of an economic unity to the parties concerned. Therefore

that is, accounting essentially presents economic information to many parties who require it. Accounting is often called the business because it is a tool of communication and information for those who need it.

Accounting is a process of identifying, measuring, and reporting economic information to enable clear and conclusive assessment and decision-making for those who use the financial information.

Accounting has actually existed since humans began to calculate and make a note, using stone, wood, and even leaves. In the 15th century, there was a development and expansion of trade by

the Venetian merchants. The development of this trade led to the need for a better listing system so that accounting began to grow. Accounting development began with Luca Pacioli in 1494, a mathematician who authored a book entitled Summa de Aritmatica, Geometrica, Proportioni et Propotionalita.

Read Also: Accounting Overview

In one of the chapters entitled Tractatus de Computies et Scriptoris, he introduced and taught a paired bookkeeping system called a continental system.

This system was introduced by Luca Pacioli with Leonardo da Vinci and has been used to record wages since Babylonian times. The Continental System is the recording of all transactions into two parts, namely, discharge and credit in a balanced manner and result in systematic bookkeeping and integrated financial statements. 

By using this system the company gets an idea of the operating income, corporate wealth, and ownership.

In the middle of the eighteenth century, there was an Industrial Revolution in England that also encouraged the development of accounting. At that time, factory managers, for example, wanted to know the cost of production. 

By knowing how much production costs, they can monitor the effectiveness of the production process and set the selling price. In line with that, developing accounting in a special field, namely, cost accounting that focuses on the recording of production costs and the provision of information for management.

The Industrial Revolution resulted in the rapid development of accounting that spread to the Americas, especially in the United States and gave birth to the Anglo Saxon system.

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