Book Keeping and Accounting Concepts | Origin and Evolution of Book Keeping | Class 11 accounting principle notes

Rate this post
Book Keeping and Accounting Concepts | Origin and Evolution of Book Keeping


CONCEPT OF BOOK-KEEPING AND ACCOUNTING

A business is a profit-making concern. It performs numerous financial transactions for the purpose of making profits. It buys and sells goods and services for cash and on credit. It acquires different types of assets for generating revenues and disposes of them when they become useless. It borrows and provides different kinds of loans. It makes several types of expenses and earns revenues from different sources. At the end of the period, therefore, it needs to know how much profit it has earned, or the loss it has suffered. It also needs to know its financial position at the end of the particular date. Besides, it needs to know how much money it owes to others and how much money others owe it. There are several other different kinds of information the business needs to know. The business needs all these kinds of information for taking several decisions and actions. Book-keeping and accounting provide all such information for that purpose. Book-keeping makes routine records for all day-to-day financial transactions in a systematic manner. Accounting systematically summarizes, presents, and interprets the information contained in the routine records. Thus, book-keeping and accounting provide meaningful financial information about the business to those who need it.

Things To Remember (TTR)
A business needs financial information to make decisions. Book-keeping and accounting provide such information for that purpose. Book-keeping makes routine records of daily financial transactions in a systematic manner. Accounting summarizes, presents, and interprets the information contained in the routine records.

ORIGIN AND EVOLUTION OF BOOK-KEEPING

The exact date of the origin of book-keeping is not yet known. It is said that the practice of bookkeeping began with the invention of money in Lydia, Greece during 700 B.C. Clearly, bookkeeping in its true sense, first, arose in classical Greece. However, the practice of the well-known system of double-entry book-keeping evolved in Italy during the 13th and 14th centuries. It became well-known to the world only after Luca Pacioli, a Franciscan friar and a lecturer on mathematics, got his book ‘Sunnna de Arithmetica, Gemnetria, Proportione et Proportionalita’ (Everything about Arithmetic, Geometry, and Proportion) first published in 1494 in Venice, Italy. The book contained a chapter headed Particulars de Conwutis et Scripturis (A Section on Accounts and Records) which dealt with the principles of double-entry book-keeping. The first English translation of be Computis was published by Hugh Old Castle in 1543, which popularized double-entry book-keeping all over the world. Many improvements were made thereafter from time to time to the original form of the double-entry system as described by Luca. Today, the double-entry system has been established as the most systematic and scientific system of book-keeping and is universally applied in all forms of entities. Therefore, Luca Pacioli is regarded as the ‘father of modern book-keeping’.

THINGS TO REMEMBER (TTR)

Book-keeping is said to have originated with the invention of money in Lydia, Greece during 700 B.C. The modem double-entry book-keeping system evolved in Italy during the 13th and 14th centuries. But, the world knew about it only after 1494 when Luca Pacioli’s book entitled “Summa Arithmetica, Geometria, Proportione et Proportionalita” was published. The book contained a chapter headed Particulars de Computis et Scripturis which described the principles and of double-entry book-keeping. Therefore, Luca is regarded as the ‘father of modern book-keeping’.

This site is a free online educational website portal. It collects & shares educational as well as job related contents and Careers Offers.

Leave a Comment

error: Content is protected !!