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History of accounting

History of accounting is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand History of accounting rather than just read about it. In short: The history of accounting or accountancy can be traced to ancient civilizations. The early development of accounting dates to ancient Mesopotamia, and is closely related to developments in writing, counting and money and early auditing systems by the ancient Egyptians and Babylonians.

History of accounting — main illustration
History of accounting — illustration

Key takeaways

  • History of accounting belongs to science; place it in that map before memorising details.
  • Learn the definition first, then one example that makes the definition concrete.
  • Connect History of accounting to a quantity you can measure, compute or draw — that is where exam questions come from.
  • Reproduce the core statement of History of accounting from memory before moving on to harder problems.

Reference excerpt

The history of accounting or accountancy can be traced to ancient civilizations. The early development of accounting dates to ancient Mesopotamia, and is closely related to developments in writing, counting and money and early auditing systems by the ancient Egyptians and Babylonians. By the time of the Roman Empire, the government had access to detailed financial information. Double-entry bookkeeping is first known to appear in late 13th century Italy. In 1494, Luca Pacioli, often recognized as the father of accounting and bookkeeping, published the earliest known work on double-entry bookkeeping, Summa de arithmetica, spreading the field throughout Italy. The modern profession of the chartered accountant originated in Scotland in the nineteenth century. Accountants often belonged to the same associations as solicitors, who often offered accounting services to their clients. Early modern accounting had similarities to today's forensic accounting. Accounting began to transition into an organized profession in the nineteenth century, with local professional bodies in England merging to form the Institute of Chartered Accountants in England and Wales in 1880.

Ancient history

Early development of accounting

Accounting records dating back more than 7,000 years have been found in Mesopotamia, and documents from ancient Mesopotamia show lists of expenditures, and goods received and traded. The development of accounting, along with that of money and numbers, may be related to the taxation and trading activities of temples: "another part of the explanation as to why accounting employs the numerical metaphor is [...] that money, numbers and accounting are interrelated and, perhaps, inseparable in their origins: all emerged in the context of controlling goods, stocks and transactions in the temple economy of Mesopotamia." The early development of accounting was closely related to developments in writing, counting, and money. In particular, there is evidence that a key step in the development of counting—the transition from concrete to abstract counting—was related to the early development of accounting and money and took place in Mesopotamia Other early accounting records were also found in the ruins of ancient Babylon, Assyria and Sumer, which date back more than 7,000 years. The people of that time relied on primitive accounting methods to record the growth of crops and herds. Because there was a natural season to farming and herding, it was easy to count and determine if a surplus had been gained after the crops had been harvested or the young animals weaned.

Expansion of the role of the accountant During the 4th and 3rd millennia BC, the ruling leaders and priests in ancient Iran had people oversee financial matters. In Godin Tepe (گدین تپه) and Tepe Yahya (تپه يحيی), cylindrical tokens that were used for bookkeeping on clay scripts were found in buildings that had large rooms for storage of crops. In Godin Tepe's findings, the scripts only contained tables with figures, while in Tepe Yahya's findings, the scripts also contained graphical representations. The invention of a form of bookkeeping using clay tokens represented a huge cognitive leap for mankind. During the 2nd millennium BC, the expansion of commerce and business expanded the role of the accountant. The Phoenicians invented a phonetic alphabet "probably for bookkeeping purposes", based on the Egyptian hieratic script, and there is evidence that an individual in ancient Egypt held the title "comptroller of the scribes". There is also evidence for an early form of accounting in the Old Testament; for example the Book of Exodus describes Moses engaging Ithamar to account for the materials that had been contributed towards the building of the tabernacle. By about the 4th century BC, the ancient Egyptians and Babylonians had auditing systems for checking movement in and out of storehouses, including oral "audit reports", resulting in the term "auditor" (from Latin: audire, to hear). The importance of taxation had created a need for the recording of payments, and the Rosetta Stone also includes a description of a tax revolt.

Roman Empire

… excerpt ends here. Continue reading the full article.

Illustrations

History of accounting: A Japanese man writing in a ledger with the help of a soroban (abacus). Meiji period, 1914
A Japanese man writing in a ledger with the help of a soroban (abacus). Meiji period, 1914
History of accounting: Globular envelope (known as a Bulla) with a cluster of accountancy tokens, Uruk period, 4000-3100 B.C.E, from Susa. Louvre Museum
Globular envelope (known as a Bulla) with a cluster of accountancy tokens, Uruk period, 4000-3100 B.C.E, from Susa. Louvre Museum
History of accounting: Part of the Res Gestae Divi Augusti from the Monumentum Ancyranum (Temple of Augustus and Rome) at Ancyra, built between 25 BCE - 20 BCE.
Part of the Res Gestae Divi Augusti from the Monumentum Ancyranum (Temple of Augustus and Rome) at Ancyra, built between 25 BCE - 20 BCE.

Worked examples

Example 1 — a first encounter with History of accounting

Start with the simplest possible case. Write down what History of accounting claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to History of accounting before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about History of accounting ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of History of accounting

In research
History of accounting appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry
Engineering practice reuses History of accounting in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom
History of accounting is common in secondary-school and first-year university syllabi. It links to neighbouring topics Economic history by industry, History by topic, History of accounting, so understanding it makes those chapters shorter.
In everyday life
Look for History of accounting outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.
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How to study History of accounting in 20 minutes

  1. Read the reference excerpt below once, without taking notes.
  2. Close the page and write down what History of accounting means in your own words.
  3. Compare your version with the excerpt and mark what you missed.
  4. Work through the three examples above with pen and paper.
  5. Explain History of accounting out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is History of accounting in simple terms?

The history of accounting or accountancy can be traced to ancient civilizations. The early development of accounting dates to ancient Mesopotamia, and is closely related to developments in writing, counting and money and early auditing systems by the ancient Egyptians and Babylonians.

Why does History of accounting matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study History of accounting?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on History of accounting.

Tags

  • Economic history by industry
  • History by topic
  • History of accounting

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