Robert A. Bonavito, CPA PC

A Brief History of Accounting as Told by a NJ Forensic Accountant

Many years ago, I was going and looking at accounting and just trying to figure out where accounting started. And there was really not a lot of information of who started accounting or who I consider the father of accounting, there was nothing like that. So what I start to do is talk about the father of accounting because I think I know who the father of accounting is and was. If you look at the history of accounting, it started in 3,500 BC. And basically then what they would do is they would have little tablets and they would have like a goat and one goat. If you saw a goat near somebody's name, that mean he owned 100 goats. And this is how accounting worked for many, many years and obviously, it caused a lot of issues because it wasn't easy to use.

And then what happened as it slowly developed, and in 1450 and Italian monk called Luca Pacioli, he wrote a book. And this book was called Summa arithmetica geometry of proportions. This book was over a thousand pages long. And if you know your history, you know what happened in 1450, this is when the Gutenberg Press was invented. And what happened to this book? Even though it was a thousand pages and very difficult to transcribe, it put it on the press and they were able to make many copies. And this is very important for Europe because Europe then was the center of the world. And the center of the known world back then was in Italy. And this book enabled him to give this to traders and they were able to use it. And the thing...the reason that the accounting portion of this book was so important is because back then, if your books didn't balance, you could be put to death. That's how serious it was. Or spend life in jail. So everybody wanted to have great books.

So in this book that Pacioli wrote, it was only 40 pages, and I've read the 40 pages. And it told them how to do an income statement, how to do a balance sheet, what a debit is. It was almost like we do now, and this is  in 1450, it was absolutely amazing. And he invented, you know, the double accounting where everything balances out and how you do cash flows. And this spread like wildfire through Europe because like I said, accounting was critical back then. If your books didn't balance, you're dead. You were dead.

So, this book started accounting, and from there, we've built on. I mean, it's's more sophisticated. There was no such thing as cost accounting, he didn't really discover that. But when I talk about the father of accounting, I talk about Luca Pacioli because I believe that he's the one who put it in...he...I guess it was there, and he wrote it down and he embellished it, and he's the one who's responsible for the spread and success of accounting. In fact, all of the commerce that we have now, everything we do and see, it's based on accounting. And it really did start in 1450. If you have any questions on this, please feel free to email me.

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