Accounting Systems

Historical Origins and Development

Rudimentary accounting systems were among the earliest forms of writing in human civilization. Use [Page 11]of clay tokens in accounting for cattle and agricultural production, for example, is documented for the Sumerian civilization from the 9th millennium BCE onward. Archaic forms of accounting did not necessarily utilize numerical representations of volume or value, as clay tokens representing specific goods could simply be stowed away to be later retrieved.

Some authors have claimed that even the practice of double-entry bookkeeping, the hallmark of contemporary accounting systems, can be traced back to very early historical precedents. The significance of the double-entry innovation is that it allows one to trace both the sources (original ownership, transfer of rights) and utilizations (investments, transactions) of goods over time. Although one may imagine instances of double-entry accounting systems that do not employ numerical representations (e.g., a cattle trader keeping separate debit and credit boxes for cow tokens), more complex exercises in reckoning with debits and credits (of producing balances and ratios, of timing and differentiating accounts, and so on) only became possible once numerical abstractions of goods were used. Because the use of double-entry methodologies is suggestive of systematic reflections on the acquisition, refinement, and sale of goods in terms of volume and value, the double-entry system tends to be considered as a prerequisite for capitalist forms of economic organization to emerge.

Regardless of earlier historical precedents to both the capitalist mode of production and the double-entry accounting system associated with it, there is little doubt that the diffusion of double-entry bookkeeping after the advent of the printing press (accounting textbooks constituted a large share of the early books that were printed and distributed in mass circulation) supported the subsequent unfolding of economic organization within capitalist modes of production and trade.

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