Accounting has been around since the very first fiscal system emerged. As agricultural trade grew in importance, it was not long before early business people began to develop and use the calculative system of accounting. The modern-day practice of accounting is certainly far more sophisticated than its ancient ancestor, but its foundation and motives have remained the same. The sole purpose of accounting is to accurately calculate and keep records of monetary exchanges.

The Origin of Accounting

Accounting saw its start in one of Earth’s oldest civilizations, ancient Mesopotamia. Early economists developed the practice as a way to keep records of agricultural trade and to further develop the early fiscal system into an efficient tool for their businesses. Accounting has been given credit in religious books, such as the Islamic book of faith, the Qur'an, and the Christian book of faith, the Holy Bible. After some time, the mathematical calculations involved in accounting made their way to practically every culture. The man who is recognized as the creator of basic accounting is Luca Pacioli, an Italian mathematician and writer. Pacioli developed a system comprehensible enough for school-age boys to understand; he recorded this system in a textbook titled Summa de Arithmetica, Geometria, Proportionate Proportionalita.

Pertinent Accounting Links

  • Accountancy: This site gives a thorough description of accounting.
  • Accounting Glossary: This dictionary of accounting terms will be helpful to those who want to become knowledgeable about the language accountants speak.
  • Famous Accountants: This page describes the 3 most famous accountants throughout history.
  • Online Accounting: Little by little, the world is going virtual—but did you ever think that accounting would, too?
  • How to Become an Accountant: Has it been your lifelong dream to become an accountant? If so, you will benefit greatly from reading this detailed how-to article.
  • How to Become a CPA: Are you a New York-based professional who wishes to become a certified public accountant? If so, reading this article will tell you all about the certification process.
  • CPAs vs. Accountants: This article explains the difference between a certified public accountant and other types of accountants.
  • Am I an Accountant or a Bookkeeper? This is a common question among recent graduates. Learn the factors that differentiate the two in this in-depth article.
  • Salary for Accountant Jobs: Ever wonder how much accountants earn on a yearly basis? If so, look at this nationwide survey for the average salaries of U.S. accountants.
Common Accounting Terms

    As in all trades, accountants speak their own language. There is a certain terminology that accountants use every day but that most laymen do not understand. These terms include:

  • "Accounts payable" – essentially means the bills a business has incurred that must be paid to its suppliers.
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  • "Cash-based accounting" –this simply translates to the practice of recording cash or check exchanges between a customer or client and a business, or a business and a supplier.
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  • "Trial balance" – this is a catalog of general ledger accounts and their totals.
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  • "Liabilities" is a well-known accounting term, but few people know its true meaning. Liabilities are the amounts of money that a business owes its creditors, including its payroll and accounts payable.

About the Author

Written by Chris Fletcher (aka the Lease Guy). Chris is a senior account executive at Crest Capital, where he manages vendor finance programs for manufacturers and dealers of equipment, vehicles, and software. He's also an active Twitterer—check out his page if you follow financial topics and current events in the world of finance.