When people picture a day in the life of an accountant, they often envision a professional diligently tapping away on the keys of a calculator while tracking the funds coming in and out of their client’s accounts. All the better to ensure the numbers add up correctly, of course. 

But thousands of years ago, when accounting was in its infancy, there were no “accounts” and there were certainly no calculators. So, what is the history of accounting, exactly? Hitch a ride on our well-oiled time machine as we journey to the past to learn more about one of the world’s oldest professions: accounting. 

The Origins of Accounting: From Then to Now 

While modern accounting is much more technical and numbers-based than its millennia-old prototype, this wasn’t always the case. Below, we look at the start of accounting and how it’s adapted to society’s changing needs over the centuries. 

8000 B.C.: It Begins 

Accounting made its grand entrance into the world more than 7,000 years ago in some of Mesopotamia’s civilizations. When historians found records dating to that time, they learned that some Mesopotamians kept track of goods they traded and received, such as livestock, animals, and crops. 

2000 B.C.: Bartering and Bookkeeping 101 

For thousands of years, societies used the barter system, trading chickens for grains or material for clothing. Despite not using money as a medium of exchange, people still used bookkeepers to keep track of barters made between individuals. Instead of numbers, the entries read more like narratives and were brought out and used when disputes between traders arose. 

The 1400s: Currency Is the New Trend 

Eventually, countries began making their own currencies. With a more modernized means of exchange came the need for mathematical whizzes to accurately record the numbers. Many merchants didn’t know how to record the comings and goings of their earnings accurately, so they hired bookkeepers to maintain their business accounts for them. 

Until the late 1400s, these records were still largely narrative. While bookkeepers began adding and subtracting amounts from the merchant’s accounts, the records were written as single entries. For example, an entry might look like this: 

  • Monday, August 18. Sold two cows. +$70. 
  • Tuesday, August 19. Bought a five-pound bag of sugar. -$5. 

The Late 1400s: A Monk Shakes Up the Status Quo 

Toward the end of the 15th century, the Italian monk Luca Pacioli changed the bookkeeping structure and set the stage for accounting as we know it today. He introduced the double-entry system that utilizes a balance sheet with separate debits and credits. Debits refer to the values coming into an account, whereas credits record the amounts coming out. 

The Late 1800s: From Bookkeeping to Accounting in One, Two, Three 

The expansion of the railroad and the beginnings of U.S. corporations meant that bookkeeping needed to up its ante. Enter accounting, bookkeeping’s older, more analytical-minded sibling. Where bookkeeping focused on tracking numbers and transactions, accounting took things a step further by analyzing those numbers to help companies make more informed decisions. With the help of accountants, businesses were more successful at attracting investors. 

The 1900s: The Need for Accountants Soars 

In 1887, the American Association of Public Accountants (AAPA) was founded due to the increasing demand for accountants. Then, in 1896, the certified public accountant (CPA) title was introduced, given to those who passed state exams and had three years of industry experience. 

In 1913, the U.S. government began charging income taxes to citizens to use as funds to supply the country’s war efforts. Because of this change, the demand for CPAs grew exponentially, with personal and professional accounts seeking the assistance of professional accountants. 

Present Day: Technological Advancements in Accounting 

Gone are the days of recording credits and debits with a quill and ink. Instead, we’ve replaced pen and paper with technology that’s infinitely more powerful than a simple calculator. Today’s accounting software has made the job more intuitive, helping CPAs complete their job more accurately and efficiently. 

Start Your Career in Accounting With a Little Help From UTPB 

Accounting has advanced by leaps and bounds in the past century alone. Who knows where these advancements will lead 20 years from now? If you’re interested in starting a career in an ever-expanding industry, The University of Texas Permian Basin can help you achieve your goals, one step at a time. 

Whether you’re ready to obtain a bachelor’s degree and jump-start your career or you want to take your current skillset to the next level by earning your master’s degree, UTPB offers two AACSB-accredited online degree options: 

Bachelor of Business Administration (BBA) in Accounting 

Gain a broad knowledge base in analyzing and solving financial problems for a diverse set of organizations including non-profit, government, public, and private. With your BBA in accounting, you’re prepared to choose from a variety of career options, from credit analyst to financial risk specialist (and plenty in between). 
 

Master of Business Administration (MBA) in Accounting 

Strengthen your strategic thinking, decision-making, and business acumen while honing your skills in traditional and contemporary accounting practices. This customizable 33- to 42-credit online program can be completed in as little as four semesters. In addition, the program offers two tracks depending on your career goals: 

  • Certified Public Accountant (CPA) track 
  • Non-CPA track 

Contact us to find out more about our programs, or if you’re ready to get started, fill out an application today! 

Sources: 
https://www.investopedia.com/articles/08/accounting-history.asp