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Accounting is as old as civilization.
The earliest bookkeeping records were used by the Egyptians in building their pyramids. This is to keep
track of the number of slaves, the number of days work, and the materials used in building these
pyramids. It is also used to register people living in towns or cities for purposes of collecting taxes
which is similar to the “ census” of today. It is also used in various trading ports to record their cargoes
loaded and unloaded
THE CRADLE OF CIVILIZATION
Around 3600 B.C., record-keeping was already common from Mesopotamia, China and India to Central
and South America. The oldest evidence of this practice was the “clay tablet’ of Mesopotamia which
dealt with commercial transactions at the time such as listing of accounts receivable and accounts
payable.
14TH CENTURY – DOUBLE ENTRY BOOKKEEPING
In Venice, Italy, merchants kept their accounts in a bilateral form (Alla Veneziana), with debits recorded
on the left side of the page across from credits. This is the “Venetian Approach” now our ledger
postings. This method was introduced in the extant books of Andrea Bargarigo.
The most important event in accounting history is generally considered to be the dissemination of
double entry bookkeeping by Luca Pacioli (The Father of Accounting’) in 14th century Italy. Pacioli was
much revered in his day, and was a friend and contemporary of Leonardo da Vinci. The Italians of the
14th to 16th centuries are widely acknowledged as the fathers of modern accounting and were the first to
commonly use Arabic numerals, rather than Roman, for tracking business accounts. Luca Pacioli wrote
Summa de Arithmetica, the first book published that contained a detailed chapter on double-entry
bookkeeping.
The “Summa de Arithmetica ”
In this book Fr. Pacioli introduced threef13) important book of records, namely:
Memorandum book-contains all the information about the transaction (narrative)
Journal Book – for the original entry
Ledger book – for the final entry posting, the center of the accounting system.
Through the Venetian Method, double-entry accounting became known to the world. The present ledger
posting is the modern adoption of the Venetian method. For this reason, Fr. Luca Pacioli is known as the
“Father of Modern Accounting” even if he was neither an accountant or a merchant.
In Genoa, Italy, The oldest double-entry books were written in 1340 entitled “Massari (Treasury Officials)
Ledgers of Commune de Genoa”. These books were known as a “perfect double-entry form”. Under the
present system, this is the simplified T-Account.
In Florence, Italy, 14th century, Amantino Manucci, invented the double-entry records wherein debts
were written over credits or the Florentine Approach. This method is now shown in the Journal Entries.
Actually, The Debit and Credit or the “DR. And CR.” Used in double-entry bookkeeping are from the Latin
words “Debere and Credere”.
Debit or Debere (DR.) means “to receive.”
A credit or Credere (CR.) means “to part with”
The double-entry bookkeeping system emphasizes the principle of balance in every
Transaction, wherein “for every value received, there is a corresponding value parted with.” Let
Us illustrate, your left hand or left side represents the Debit, and your right hand or right side
Represents the Credit. Both hands should have equal values. And, this is easily represented by
The T-account.
THE FRENCH REVOLUTION (1700s)
The thorough study of accounting and development of accounting theory began during this period.
Social upheavals affecting government, finances, laws, customs and business had greatly influenced the
development of accounting.
THE INDUSTRIAL REVOLUTION (1760-1830)
Mass production and the great importance of fixed assets were given attention during this period.
19TH CENTURY — THE BEGINNINGS OF MODERN ACCOUNTING IN EUROPE AND AMERICA
The modern, formal accounting profession emerged in Scotland in 1854 when Queen Victoria granted a
Royal Charter to the Institute of Accountants in Glasgow, creating the profession of the Chartered
Accountant (CA). In the late 1800s, chartered accountants from Scotland and Britain came to the U.S. to
audit British Investments. Some of these accountants stayed in the U.S., setting up accounting practices
and becoming the origins of several U.S. accounting firms. The first national U.S. accounting society was
set up in 1887. The American Association of Public Accountants was the forerunner to the current
American Institute of Certified Public Accountants (AICPA).
THE PRESENT – THE DEVELOPMENT OF MODERN ACCOUNTING STANDARDS AND COMMERCE
The accounting profession in the 20th century developed around state requirements for financial
statement audits. Beyond the industry’s self-regulation, the government also sets accounting standards,
through laws and agencies such as the Securities and Exchange Commission (SEC).

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Accounting is as old as civilization.

THE CRADLE OF CIVILIZATION

14TH CENTURY – DOUBLE ENTRY BOOKKEEPING

The “Summa de Arithmetica ”

Memorandum book-contains all the information about the transaction (narrative)

Journal Book – for the original entry

Debit or Debere (DR.) means “to receive.”

A credit or Credere (CR.) means “to part with”

The double-entry bookkeeping system emphasizes the principle of balance in every

THE INDUSTRIAL REVOLUTION (1760-1830)

19TH CENTURY — THE BEGINNINGS OF MODERN ACCOUNTING IN EUROPE AND AMERICA

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