History of Accounting

news report has a history that is usu exclusivelyy discussed in terms of iodin creative event- the invention and dissemination of the double unveiling countersignkeeping processes. Paul forgather and Atsuo Tsuji (1995) report that the first printed treatise of bookkeeping in the world is the Summa de Arithemetica, Geometria, Proportioni et Proportionalita written by Luca Pacioli. The treatise was published in Venice in 1494, and was reprinted at Toscolano in 1523. This work is one of the most important books on mathematics and has had an enormous impact on the field of business relationshiping ever since. The Treatise 11 of Section 9 of this book that is, particulars de Coputis et Scripturis, is a treatise about double inlet bookkeeping.The agreement of bookkeeping that Luca Pacioli depict first introduced the practice and theory that had developed in commercial cities in Italy, particularly in Venice. Pacioli wrote in the first chapter of his treatise, We will here scoop out the method employed in Venice which among opposites is certainly to be recommended, for with it one set up carry with any other method. Pacioli was born in Borgo San Sepolcro, lived in Venice and became the tutor of the three sons of a rich merchant, Antonio de Rompiasi. It seems that he could have had the disaster to see the account books of the Venetian merchants and to study the method of double entry bookkeeping in Venice.The bookkeeping system that Luca Pacioli has several distinct characteristics1. Pacioli wrote that in that respect are three things needed by one who wished to carry on business diligently. The most important of these is cash or any other substantial power. The second is a good accountant and a stabbing bookkeeper. The third is good order in order to arrange all business to debit and reference. 2. Pacioli explained the opening inventory, but he did not bring up the closing inventory. 3. Paciolis account book system is three account books- that is, a day book. The day book is the first book, the journal is the second book and the ledger is the third book. Pacioli thought of the day book as the micturateal account book, because he wrote that the day book essential be presented to a certain mercantile office. 4. All things pertaining to a transaction must be written in the day book, without omission. Pacioli wrote that no point must be omitted in the day book. 5. Pacioli described debit and credit- that is, per and A in the journal, and die havere in the ledger.However, any view of accounting history that begins with Luca Paciolis contributions will overlook a long evolution of accounting systems in past and medieval times. In attempting to explain why double entry bookkeeping developed in 15th century Italy instead of superannuated Greece or Rome, accounting scholar A. C. Littleton describes seven key ingredients which led to its creation.-Private property The power to change ownership, because bookkeeping is concerned w ith place downing the facts about property rights. -Capital Wealth productively employed, because otherwise commerce would be trivial and credit would not exist. -Commerce The interchange of goods on a widespread level, because purely local trading in small volume would not create the illuminate of press of business needed to spur the creation of an organized system to replace the existing hodgepodge of record-keeping.-Credit The present use of future goods, because at that place would have been little impetus to record transactions completed on the spot. Writing A mechanism for making a permanent record in a ordinary language, given the limits of human memory. Money The common denominator for exchange, since there is no need for bookkeeping except as it reduces transactions to a set of monetary values. Arithmetic A method of reason the monetary details of the deal.Many of these factors did not exist in ancient times, but, until the Middle Ages, they were not found togethe r in a form and strength necessary to push man to the innovation of double entry. Writing, for example, is as old as civilization itself, but arithmetic- the systematic manipulation of takings symbols- was really not a tool possessed by the ancients. Rather, the retentive use of Roman numerals for financial transactions long after the presentation of Arabic numeration appears to have constrained the earlier creation of double-entry systems.