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History Development of Accounting


Submitted By riri1990
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Development in Accounting Theory * General Scientific Period (1800-1955) * Normative Period (1957-1970) * Positive Era (1970s) * Behavioral Research (1980s)
Evolution of Double-Entry Book Keeping * Early History of Accounting * 4500-3600 BC
-Chaldean Babylonion
-Assyrian and Sumerian Egyptian
-Chinese( Chao Dynasty)
-Roman * 11th to 13th century
-Italian Renaissance * Luca Pacioli’s Contribution * Introduction of double-entry book keeping, Dr and Cr were used for entries to secure double entry. * Three book are used:
* Development of double entry * 16th Century: a few changes are made in the book-keeping techniques. * 17th Century: separate inventory accountant for different types of goods. * 18th Century: Three methods of treating fixed assets * 19th Century: depreciating property was accounted for unsold merchandise

4 reasons generally advance to explain the role of double-entry in the economic expansion: * Double-entry contributed to a new attitude toward economic life. * The acquisition was aided and propelled by systematic organisation. * It permits a separation of ownership and promotes the growth of the large joint stock company. * The new rationalism was further and enhance by systematic organization.

Capitalism and Accounting * the linked between accounting and capitalism become known as the Sambart thesis or argument that the tranformstion af assets into abstract values and the quantitative expression of the result of business activities systematic accouting in the form of double-entry bookkeeping.
Accounting Theory
A set of broad principles that provides a general frame of reference by which accounting practices can be evaluated and guides the development of new practices and procedures. (E.S.Hendriksen)

Development of Accounting Principles in the USA * 1900-1933: Managment Contribution Phase
Management had complete control over the selection of financial information disclose in annual report. * 1933-1946: Institutional contribution phase
Increasing influence by several institutions and committees in the development of accounting principles. * 1959-1973: The professional contribution phase
The professional bodies played a significant role in developing principles * Political phase
Continued to the present, the FASB and various pressure group are moving toward politicization of accounting.

What is accouting?
A study of the evolution in accounting thought, practices and institutions in response to change in the environment and societal needs. It also considers the effect that this evolution has worked on the environment.(Committee on Accounting History, 1920)


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