The origin of
accounting as a social study can be traced back to every ancient days. It is as
old as the beginning of the use of money itself.
Even under the
barter system, some primitive form of accounting existed. Till the 13th
century, the mode of keeping accounts was primitive. A French merchant wrote in
his book: ‘Lent 10 gold coins to a man last year. In Europe, calculations were
made largely in Roman numerals and sum were very often wrong.
System of
accounting developed in the 15th century and its genesis can be
traced to Double Entry bookkeeping which is said to be fashioned by Fra Luca
Pacioli (about 1445-1520), he was multi-talented mathematician and philosopher
of Venice.
Double Entry
System remained ignored in Europe, people continued following what is called Stewardship Accounting, the method of
keeping accounts of household expenses followed by stewards.
With the advent
of joint stock companies, ownership was separated from the management, the idea
of bookkeeping using double entry system recognized.
The need was statutorily
recognized, and there emerged as an information system for the investors and
other such statements as Balance Sheet, Profit and Loss Account, etc.
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