Brief History of Accounting

In the olden days, human beings were self-centered and because of that they only cared for themselves. They were not thinking as we do these days regarding wealth and luxurious life.

They were only after what they would eat, what they would put on (wear) and where to live (shelter). They engage in farming and hunting for animals in order for them to eat.

They were doing all these things in order to keep their lives going. Eventually they realized that they were not satisfied with what they had alone. For one might have cassava but needed rice or had food to eat but needed farming implements such as hoes and cutlasses.

For this reason, therefore, they resorted to a trade that referred to as trade by barter. It is a trade because it is an exchanged of goods for goods.

The aim of forming this barter system was that Mr. Ike might need a farming tool (cutlass) but he had to do was to exchanged his trade by barter, they found out that it was tiresome and weak.

That its problems had overridden its benefits because of the following points:

Lack of agreement: Here, one may need a certain quantity of goods but find it difficult to see who will agree to exchanged the quantity with its equivalent worth.

Time consumption and boredom: Here, a lot of time is consumed for someone to carry the goods from one place to another in search of whom to exchange the goods with. Also it can be tiresome for him carrying these goods about.

Distance: Here, one will find it difficult to foretell how long he or she will trek before getting someone to exchange the goods with.

With the above problems that are associated with the barter system, a common means by which one could get whatever quantity of goods he waned was sought. And this consequently brought about the evolution of “Money”.

They used this money to exchange all the goods they wanted, small amounts of this money would exchange for small quantities of goods and likewise bigger quantities of goods and likewise bigger quantities of goods as well.

Based on this fact, counting and keeping gave way thereby bringing in the record of money. This is the invention of book-keeping and accounts.

With the introduction of money as a medium of exchange in the system, a trade between two parties progressed from a man-to-man activity, though in a series of uncoordinated undertakings into partnerships and that of joint stock companies. As these commercial activities got more complex, the very art of book-keeping and account continued to progress.

Leave a Comment

not allowed!