ACPB
Accounting 1A
Learning unit 1
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
,Learning Unit 1: A brief history of
accounting
Theme 1: A brief history of accounting:
- Can be traced back 5000 years.
- Started in small villages and communities of people.
- A need arose to be able to record one’s assets and pieces of properties
and keep them in file.
- People wanted to account for their property iot (in order to) legally
prove ownership.
- Accounting = first form of primitive language
- Societies began to develop their own written language and began
recording them on stones
- The system was crude & difficult to prove legitimate
- This ‘crude’ system lasted until the 12th Century BC.
- At this time, trading had begun to increase between different societies.
- The trading soon became wide spread (Italy = cornerstone of this trading
movement)
- Romans were most developed society.
- Romans used roman numerals to record assets.
- Arabic numerals were developed centuries before this and the Romans
saw this as a new tool they could use.
- Arabic numerals were more precise than roman numerals
- Romans were the first to use these numerals to record financial
information.
- They used numerals to record capital, assets and liabilities.
- Through this came the developments of the double-entry accounting
system.
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
,Double-entry accounting system
- First modern form of accounting
- Double – entry accounting system (hereafter, DEAS) = base of
accounting system
- The DEAS was developed by Lucas Pacioli.
Information regarding Lucas Pacioli
- Born in 1445 in Sansepolcro, Tuscany
- Mathematician
- Friend of Leonardo De Vinci
- Published his famous book, Summa de Arithmetica, Geometria,
Proportioni et Proportionalita
- The book made him a celebrity and he was named “The Father of
Accounting”
- He did not invent the DEAS, but instead superbly described a method
used by the Church.
- His system included most of today’s accounting routines
- Pacioli stated 3 things needed a successful merchant needs:
Sufficient amount of cash or credit
Thorough bookkeeping, with detailed lists of transactions
An accounting system which makes it easy for one to look at
transactions very quickly & efficiently.
Key Moments in Accounting History
- Around 3300BC = Tax records on clay tablets
- 1458 = Double – entry accounting system
- 1494 = First book with accounting concepts
- 1845 = First professional accountant organizations
- 1880’s = Adding machine
- 1955 = First computer for accounting
- 1978 = First spreadsheet software
- 2000 = Accounts payable automation
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
, Theme 2: Why we record financial information
Users and uses of financial information
Users of accounting information
Investors:
- The providers of capital and their advisers are concerned with the risk
inherent to, and return provided by, their investments.
- They need information to help them determine whether they should
buy, hold or sell.
- Shareholders are also interested in information which enables them to
assess the ability of the enterprise to pay dividends
Employees and labour unions
- Interested in information about the stability and profitability of
their employers
- Interested in information which enables them to assess the
ability of the enterprise to provide remuneration, retirement
benefits and employments opportunities.
Lenders
- Interested in information that enables them to determine
whether their loans, and the interest attached to these, will be
paid when due.
Suppliers & other trade creditors
- Interested in information that enables them to determine whether
amounts owing to them will be paid when due.
- Trade creditors interested in an enterprise over a shorter period than
lenders, unless they are dependent upon the continuation of the
enterprise as a major customer.
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
Accounting 1A
Learning unit 1
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
,Learning Unit 1: A brief history of
accounting
Theme 1: A brief history of accounting:
- Can be traced back 5000 years.
- Started in small villages and communities of people.
- A need arose to be able to record one’s assets and pieces of properties
and keep them in file.
- People wanted to account for their property iot (in order to) legally
prove ownership.
- Accounting = first form of primitive language
- Societies began to develop their own written language and began
recording them on stones
- The system was crude & difficult to prove legitimate
- This ‘crude’ system lasted until the 12th Century BC.
- At this time, trading had begun to increase between different societies.
- The trading soon became wide spread (Italy = cornerstone of this trading
movement)
- Romans were most developed society.
- Romans used roman numerals to record assets.
- Arabic numerals were developed centuries before this and the Romans
saw this as a new tool they could use.
- Arabic numerals were more precise than roman numerals
- Romans were the first to use these numerals to record financial
information.
- They used numerals to record capital, assets and liabilities.
- Through this came the developments of the double-entry accounting
system.
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
,Double-entry accounting system
- First modern form of accounting
- Double – entry accounting system (hereafter, DEAS) = base of
accounting system
- The DEAS was developed by Lucas Pacioli.
Information regarding Lucas Pacioli
- Born in 1445 in Sansepolcro, Tuscany
- Mathematician
- Friend of Leonardo De Vinci
- Published his famous book, Summa de Arithmetica, Geometria,
Proportioni et Proportionalita
- The book made him a celebrity and he was named “The Father of
Accounting”
- He did not invent the DEAS, but instead superbly described a method
used by the Church.
- His system included most of today’s accounting routines
- Pacioli stated 3 things needed a successful merchant needs:
Sufficient amount of cash or credit
Thorough bookkeeping, with detailed lists of transactions
An accounting system which makes it easy for one to look at
transactions very quickly & efficiently.
Key Moments in Accounting History
- Around 3300BC = Tax records on clay tablets
- 1458 = Double – entry accounting system
- 1494 = First book with accounting concepts
- 1845 = First professional accountant organizations
- 1880’s = Adding machine
- 1955 = First computer for accounting
- 1978 = First spreadsheet software
- 2000 = Accounts payable automation
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
, Theme 2: Why we record financial information
Users and uses of financial information
Users of accounting information
Investors:
- The providers of capital and their advisers are concerned with the risk
inherent to, and return provided by, their investments.
- They need information to help them determine whether they should
buy, hold or sell.
- Shareholders are also interested in information which enables them to
assess the ability of the enterprise to pay dividends
Employees and labour unions
- Interested in information about the stability and profitability of
their employers
- Interested in information which enables them to assess the
ability of the enterprise to provide remuneration, retirement
benefits and employments opportunities.
Lenders
- Interested in information that enables them to determine
whether their loans, and the interest attached to these, will be
paid when due.
Suppliers & other trade creditors
- Interested in information that enables them to determine whether
amounts owing to them will be paid when due.
- Trade creditors interested in an enterprise over a shorter period than
lenders, unless they are dependent upon the continuation of the
enterprise as a major customer.
Created by Jalene Terblanche
This document is protected under the Copyright Act 98 of 1978.
No illegal distribution of the document is allowed
