Origin and Evolution or History of Accounting

Summary

This video delves into the fascinating history of accounting, tracing its roots back to the dawn of human civilization. It outlines four key stages: the Development Period (pre-1494) marked by primitive methods like cave engravings and the abacus; the Pre-Analytical Period (1494-1800), where Luca Pacioli's contributions laid the foundation of modern accounting; the Analytical Period (1800-1950), characterized by the emergence of new accounting theories; and the Modern Period (post-1950), witnessing the evolution to computerized accounting systems and the establishment of accounting standards.

Takeaways

• 📚 The history of accounting is intertwined with the history of human civilization, suggesting its ancient origins.
• 🏺 The development period of accounting, pre-1494, is marked by the use of various primitive methods like cave engravings and abacus for bookkeeping.
• 🧮 The stone age saw the use of images and symbols for accounting, while the ancient age utilized knots in ropes and marks on walls.
• 🔄 The exchange age introduced the concept of goods exchange, recorded through wall paintings and wooden carvings.
• 💰 The money age was characterized by the use of currency and cory leather as mediums of transaction.
• 📈 The pre-analytical period from 1494 to 1800 saw rapid expansion in trade and commerce, with Luca Pacioli establishing the fundamentals of debit and credit.
• 🔬 The analytical period from 1800 to 1950 marked the beginning of modern accounting with the invention of new theories and research.
• 🌐 The current or modern period post-1950 has witnessed significant changes in accounting, including the establishment of accounting standards and the emergence of various accounting branches.
• 💻 Modern accounting has transitioned from manual methods to computerized systems for maintaining accounts.
• 🌟 Luca Pacioli is recognized as the father of accounting and bookkeeping, contributing greatly to the field during the pre-analytical period.

Q & A

What is the relationship between the history of accounting and human civilization?

The history of accounting is intrinsically linked to the history of human civilization, suggesting that accounting practices have been present since the beginning of human societies.

How many stages is the origin and evolution of accounting divided into?

The origin and evolution of accounting are divided into four stages: Development Period pre-1494, Pre-Analytical Period 1494-1800, Analytical Period 1800-1950, and Current or Modern Period post-1950.

What were the two types of images or symbols used for bookkeeping during the Stone Age?

During the Stone Age, people used cave engravings and different types of images or symbols for bookkeeping.

How did people keep accounts during the Ancient Age?

In the Ancient Age, people kept accounts by making knots with ropes and making marks on walls and bamboo.

What instrument was used for accounting in China during the Exchange Age?

An instrument called the abacus was used for accounting in China during the Exchange Age.

What significant change occurred in the field of accounting during the Pre-Analytical Period?

During the Pre-Analytical Period, trade and commerce expanded rapidly, and Luca Paczoli, known as the father of accounting and bookkeeping, discovered the basis of debit and credit of accounts.

Who is considered the father of accounting and why?

Luca Paczoli is considered the father of accounting because he discovered the fundamental principles of debit and credit, which form the basis of modern accounting.

What marked the beginning of modern accounting?

The Analytical Period, from 1800 to 1950, marked the beginning of modern accounting with the propagation of accounting research and the invention of new theories.

How has the practice of accounting changed since the Modern Period post-1950?

Since the Modern Period post-1950, there has been a significant change in the science of accounting with the issuance of accounting standards and the emergence of various branches of accounting. Additionally, the practice has shifted from manual to computerized accounting.

What is the significance of the Cory leather in the Money Age?

In the Money Age, Cory leather was used as a medium of transaction, indicating the evolution of accounting practices to accommodate the use of currency.

How has technology impacted the way accounts are kept today?

Technology has significantly impacted accounting by allowing accounts to be kept in computers rather than manually, which has increased efficiency and accuracy in the field.