Text 4. The development of the accounting thought

Accounting has a long history. Some scholars claim that writing arose in order to record accounting information. Account records date back to the ancient civilizations of China, Babylonia, Greece, and Egypt. The rulers of these civilizations used accounting to keep track of the cost of labour and materials used in building structures like the great pyramids.

Accounting developed further as a result of the information needs of merchants in the city-states of Italy during the 1440s. In that commercial climate the monk Luca Pacioli, a mathematician and friend of Leonardo da Vinci, published the first known description of double-entry book-keeping in 1494.

The double-entry accounting system - in which for every "debet dare" there is a "debet habere" - has evolved to the point where it is very much like the present day system. Debet dare and debet habere are Latin terms meaning "should give" and "should have" respectively.

The pace of accounting development increased during the Industrial Revolution as the economies of developed countries began to mass-produce goods and increased competition required merchants to adopt more sophisticated accounting systems.

In the 19^th century, the growth of corporations, especially those in the railroad and steel industries, spurred the development of accounting. Corporation owners -the stockholders- were no longer the managers of their business. Managers had to create accounting systems to report to the owners how well their businesses were doing.

The role of government has led to still more accounting development. When the federal government started the income tax, accounting supplied the concept of "income". Also, government at all levels has expanded its role in health, education, labour, and economic planning and it required strict accountability and compliance with standards in the business community.

Since the mid—20^lh century bookkeeping as an essential part of all accounting systems has been carried out by machines. The introduction of computers broadened the scope of bookkeeping and the term "data processing" now often associates with bookkeeping.

Exercise. Complete the following sentences according to the text .