Chapter 1 The history and development of

Transcript:Chapter 1 The history and development of:
Chapter 1 The history and development of accounting 1.1 Introduction Why history of the development of Accounting is important? History of the development of Accounting is important to an: 1- understanding and 2- appreciation of present and future practices, as well as of the institutional structure of the discipline. 2 1.2 Evolution of Double Entry Book-keeping. 1.2.1 Early history of accounting There is evidence of double entry accounting in many early civilisations: Chaldean–Babylonian Assyrian Sumerian Egyptian Chinese Greek Roman 3 1.2.1 Early History of Book-Keeping: Attempts have been made to locate time and place of birth of the double entry system. Following Civilizations dating back to 3000BC recognizes some form of record-keeping. Chaldean-Babylonion, Assyrian and Sumerion civilization– Producer of the first organized government of the world, oldest written languages and oldest surviving business records. 4 Egyptian Civilization: where scribes formed the pivots on which the whole machinery of the treasury and other departments turned. (Scribes: Not everyone was allowed to learn ( read and write) in ancient Egypt. Only one group of people called scribes was allowed to have this knowledge. Pivot, the point of rotation in a lever system; More generally, the center point of any rotational system) The Chinese Civilization: Govt. Acc playing a key and Sophisticated role during the Zhou Dynasty (empire) (1122-249 BC). Greek Civilization: Where Zenon introduced an elaborate system of responsibility accounting in 256 BC. Roman Civilization: laws requiring taxpayers to prepare statements of their financial positions and with civil rights depending on the level of property declared by citizens. 6 The presence of these forms of book-keeping in ancient world has been attributed to various factors .e.g, the invention of writing, introduction of Arabic numerals and decimal system, the knowledge of Algebra, the presence of inexpensive writing materials , the rise of literacy, the existence of standard medium of exchange. 7 A C. Littleton’s lists seven preconditions for the emergence of systematic bookkeeping are: The art of writing(Since Book-keeping is first of all a record) Arithmetic (Since the mechanical aspect of book-keeping consists of a sequence of simple computations) Private property (Since book-keeping is concerned only with recording the facts about property and property rights ) 8 A C. Littleton’s lists seven preconditions ..Continued Money(i.e. among economy . Since book-keeping reduces all transactions in property or property rights to this common denominator ) Credit (i.e. incomplete transactions . Since there would be little