Accounting in a very simple sense is maintaining a record of varied activities. Thus, Accounting is some things that are used almost by everyone in their daily lives. In our lifestyle, we maintain a record of varied transactions or activities. Let’s talk about the Development of Accounting.
Development of Accounting
In past, around 4000 B.C., accounting was used for recording wages and salaries, deposits and withdrawals of valuable goods (such as gold and silver) from the treasures of the king. Afterward, it was used to record the receipts and payments and balance of government financial transactions. During 1500 A.D., accounting was employed by business firms for recording transactions associated with the business. In 1800 A.D., accounting was wont to record transactions and also to supply information to varied users of monetary data.
During ancient times, accounting was merely concerned with the recording of financial transactions i.e. bookkeeping. But with the passage of time, the role of accounting has changed. In today’s world, the role of accounting is extended to provide relevant information to various users. With the passage of time, as the scope of business increased, their expenditure on different activities, in turn, increased which lead to a large number of transactions. To memorize the huge and complicated transactions is beyond human capacity.
Therefore, it becomes necessary to record them properly in the books in a systematic manner so that the exact position at the end of the day can be easily ascertained. For this, there arises a need for a sophisticated system that has been fulfilled by Accounting. Therefore, in the modern world, the area of accounting has broadened and is no more limited to the recording of transactions only. Accounting has evolved with the passage of time.
Thus, Accounting, in simple terms, is the recording of various transactions, that took place during a particular period, in the books of accounts in a systematic and proper manner. Accounting, nowadays, is just not limited to recording transactions in the books but also to convey useful information to its users.
Also, Read What is Accounting?