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HISTORY OF
ACCOUNTING
MR. GERALD J. LANIP, MBA, MICB, CTT
Lecturer
ALLPPT.com _ Free PowerPoint Templates, Diagrams and Charts
But first, what is Accounting?
Accounting…
• is an information system that provides
quantitative, financial information
stakeholders about the economic activities and
condition of a business so that they can make
business/economic decisions.
Historical Development of Accounting
Primitive Accounting
 Accounting began as a simple system of
clay tokens to keep track of goods and
animals, before developing complex
transactions and other financial information.
 The origin of keeping accounts has been
traced as far back as 8500 B.C., the date
archaeologists have established for certain
clay tokens found in Mesopotamia (modern
Iraq)
History of Accounting
An Overview
• Because natural resources are limited, people have to
know food crops, and raise domesticated animals to
be able to sustain life.
• During cropping and livestock, human observed,
recorded the wastage and labor spent to achieve
results, then compare, evaluate what to plant, what
brings most benefit.
The primitive form of Accounting was created…
Historical Development of Accounting
Primitive Accounting
People have counted and kept records
to
throughout history.
Dating back about 10,000 years, the first
accounting system probably consisted of stones
used to represent wealth.
Historical Development of Accounting
Primitive Accounting
The tokens were often sealed in
clay balls, called “bullae”, which
were broken on delivery so the
shipment could be check against
the invoice; “bullae” (clay envelope)
in effect, were the 1st bills of lading.
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Historical Development of Accounting
Primitive Accounting
Later, symbols impressed on wet
clay tablets replaced the tokens.
Starting around 3000 B.C., the
Chinese developed the abacus, a
tool for counting and calculating.
Historical Development of Accounting
Primitive Accounting
Account records date back to the
ancient civilizations of China,
Babylonia, Greece and Egypt.
People in these civilizations
maintained various types of records
of business activities.
Historical Development of Accounting
Primitive Accounting
The agreed-upon transaction
was recorded by the Scribe
(the predecessor of the
modern accountant) on a small
mound of clay with the parties
affixing “their signatures” on it.
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Historical Development of Accounting
Primitive Accounting
Some experts consider this stage
of record keeping the beginning of
the art of writing, which spread
rapidly along the trade routes and
took hold throughout the known
civilized world.
Historical Development of Accounting
Primitive Accounting
During the 1st dynasty of Babylonia
(2286-2242 B.C.), its law which
was based on the Code of
Hammurabi, requires merchants
trading goods to give buyers a
sealed memorandum containing
the agreed price before it can be
considered enforceable.
Historical Development of Accounting
Primitive Accounting
 At around 3600 B.C. in Babylonia,
clay tablets also recorded payment
of wages.
 The rulers of these civilizations used
accounting to keep track of the costs
of labor and materials used in
building structures as in the case of
the pharaohs of Egypt in building
their great pyramids.
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Historical Development of Accounting
Primitive Accounting
 Accounting is one of our oldest skills.
 The earliest collections of understandable
writing track how many bushels of grain
came into the king’s warehouse.
 Tablets recorded who brought in the grain
and how much the king took as his share.
 Even in the early days, tax collecting is an
activity closely linked to accounting.
Historical Development of Accounting
Middle Ages Accounting
 The Inca Empire, which spanned the west
coast of South America throughout the 11th
and 14th centuries, used knotted cords of
different lengths and colors called quipu to
keep accounting records.
 Development of more formal account-
keeping methods is attributed to the
merchants and bankers of Florence and
Venice during the 13th and 15th centuries.
Historical Development of Accounting
Middle Ages Accounting
 Double-entry bookkeeping is not a
discovery of science; it is the outcome of
continued efforts to meet the changing
necessities of trade.
 German Philosopher, Oswald Spengler,
wrote in The Decline of the West (1928)
that the invention of double-entry
bookkeeping was the decisive event in
European economic history.
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Historical Development of Accounting
Middle Ages Accounting
 As a result of Crusades from 11th to the
13th centuries, Northern Italy’s literacy has
become widespread.
 Arabic Numerals were also being used as
a result of trade with the Near East
Allowing columns of numbers to be added
and subtracted.
 The use of credit was prevalent and a
semblance of an international banking
systems was also functioning.
Historical Development of Accounting
Middle Ages Accounting
 The earliest of these methods consisted of
accounts kept by a Florentine banker in
1121 A.D.
 The system was primitive; accounts were
not related in any special way (in terms of
equality for entries), and balancing of the
accounts was lacking.
 Systematic bookkeeping evolved from
these methods, however, and double-entry
records appeared in Genoa in 1340 A.D.
Historical Development of Accounting
Middle Ages Accounting
 Double-entry bookkeeping means that
each transaction is recorded at least twice,
as a debit from one account and a credit to
another.
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Historical Development of Accounting

Middle Ages Accounting
 For the continuation See Powerpoint in
Introduction to Accounting.