Evolution of the Accounting System

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Trade and Commerce have been an integral part of the major interactions between different organizations, nations and different places of the world. Whether it is of goods and commodities or of services, it is only because of a rising level of these activities over a period of time that the world eventually became an integrated economy. Trade and Commerce originated with human communication in prehistoric times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of modern-day currency. With the increase in the volume of trade and commerce came a need to record or maintain an account for the transactions that were taking place. 

The history of accounting or accountancy can be traced to ancient civilizations. Many historians hypothesize that one reason writing systems were developed was to record trade transactions. Some of the early writings discovered by archeologists are accounts of tax records on clay tablets. The early development of accounting dates to ancient Mesopotamia and is closely related to early auditing systems by the ancient Egyptians and Babylonians. By the time of the Roman Empire, the government had access to detailed financial information. 

In 2019, the global trade value of goods exported throughout the world amounted to approximately 19 trillion U.S. dollars. In comparison, this figure stood at around 6.45 trillion U.S. dollars in 2000. From this the fact is quite evident that, in the years to come, after the market recovers from the shock by the pandemic, the volumes of transactions are expected to rise. Since the scope of trade and commerce is so dynamic and diverse, the significance of its study, and a clear understanding of accounting system or accountancy automatically seems essential. Every year several students enroll themselves into top-notch universities and colleges and pursue degree courses in accounting, trade, commerce and management that’ll equip them to build a  lucrative professional life. 

Keeping this vision in mind, the accounting assignment writing services experts at Archlite believe that knowing a brief history of the subject one is pursuing a degree in, helps immensely in developing a deeper understanding of the subject and the related concepts. Through years of experience in assignment writing services our team tries to briefly explain the evolution of accounting systems by dividing it in four parts for easy comprehension that would positively intrigue our readers. So, without further ado, let’s take a read!

01. Ancient History 

Accounting records dating back more than 7,000 years have been found in different parts of the world, in the ruins of different ancient civilizations like in Mesopotamia, Babylon, Assyria and Sumer. The people of that time relied on primitive accounting methods to record the growth of crops and herds. With expansion in the business activities the role of an accountant also expanded. Auditing systems were needed for checking movements in and out of storehouses. Also, the importance of taxation had created the need for the recording of payments.

02. Roman Empire 

By the time of Emperor Augustus, the Roman government had access to detailed financial information as evidenced by the Res Gestae Divi Augusti (Latin: “The Deed of the Divine Augustus”). The inscription listed and quantified his public expenditure, including distributions to the people, grants of land or money to army veterans, subsidies to the treasury, building of temples, and religious offerings, covering a period of about 40 years. The scope of accounting information at the emperor’s disposal suggests that its purpose encompassed planning and decision making.   

03. Medieval and Renaissance Period 

In the eight century, Persia, al-Khwarizmi (known as Algorithmi in Europe) established the mathematics of algebra and laid guidelines on double entry bookkeeping required for the solution to the Islamic inheritance allocations. The three-fundamental accounting-algebraic concepts his book introduces are:

  • Debits = Credits 
  • Real Accounts 
  • Nominal Accounts 

Then later, in the Renaissance period, Luca Pacioli published a book which explained the Hindu-Arabic numerals, new developments in mathematics, and the system of double-entry in Italian vernacular language, and it became popular among the influential merchant class. His work represents the first known printed treatise on bookkeeping, and is widely believed to be the forerunner of modern bookkeeping practice. 

With the development of Joint-Stock Companies the audiences for accounting information increased. This development resulted in a split of accounting systems for internal (i.e., management accounting) and external (i.e., financial accounting) purposes. 

04. Modern Professional Accounting

Modern Accounting is a product of centuries of thought, custom, habit, action and convention. The current state of this profession got formed by two concepts. Firstly, the development of double-entry bookkeeping system, and secondly, accountancy professionalization. The modern profession of chartered accountant originated in Scotland in the 19th century. When Britain’s Industrial Revolution was in big swing, companies proliferated and the demand for reliable accountancy shot up, consequently the profession became an integral part of the business and financial system. 

We hope that this post intrigued you and kindled further interest in learning more about the same. Pursuing a college degree in accountancy is not a child’s play. There are so many typical concepts to understand and master. Students work day and night to complete their assignments in time as well as finish the curriculum for exams. Managing it all together is grueling, and the students are not able to get the grades they desire. Have you been struggling the same way? Whatever may be the reason, if you’re having trouble keeping up with the assignments, then you should take the best accounting assignment help offered by Archlite. Our team of professional writers has years of experience and in-depth knowledge about the subject at hand. They can work on any given topic, no matter how tricky it is. That is the reason why so many students trust our services and rest assured. So, what are you weighing up? Take assignment writing services from us and be ready to thrive in academics. We are just a call away!

 

  

 

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