History of accounting

History of Accounting

Humans have been practicing accounting since time immemorial . Archaeologists have found clay tablets in Middle East1 with writings and numbers as a form of accounting for wars, harvest and taxes.

The modern `double entry bookkeeping` system is thought to be Italian in origin. India had and still has sophisticated accounting system which is different from the double entry system.

Like all trades, accountants have being forming associations to advance their interests; earliest known example is Collegion di Rasonati in Venice formed in 1581. Members were auditors of ship building business in Venice Arsenale.

Word debit and credit are of medieval Tuscan2 origin, a form of Latin language. According to that `he owes` is debit and `he trusts` is credit.

Debits are traditionally entered on the left-hand side of a ledger and credits on the right-hand side. Some reason the origins to be Christian in nature – in the Bible3; at the last judgement, when we are called to account, the sheep (the good) go up on Christ’s right and the goat (the bad) to the left.

So, whose balance shall we put on the left: that of the wretched customer who has not yet paid us, or that of the kind supplier who has trusted us to pay later? Hence debtors’ balances are entered on the left4.

Earliest surviving book which mentions double entry bookkeeping  is of Luca Pacioli. Please note Luca did not invent double bookkeeping, it had been practiced for more than 200 years before him.



  1. Some scientists believe first human civilisations started in Middle East in the Fertile Crescent.
  2. Language spoken in Tuscany region of Italy.
  3. As seen from the painting of last judgement by Michelangelo in Sistine Chapel in Rome. Poor me – I have walked past Sistine Chapel but not been inside.
  4. This paragraph is so beautiful that I lifted it straight from the book – Accounting a short introduction by Christopher Nobes.


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