Origins of the Procedures and Processes
The origins of the accounting cycle can be traced to the Renaissance Era (14th - 16th century) through the works of an Italian Franciscan friar by the name of Luca Bartolomes Pacioli.
The bookkeeping instructions were included in Fray Pacioli’s book The Summa, which contained 36 chapters about bookkeeping. It was not introduced as an accounting discipline but as part of mathematical procedures, which merchants could utilize in monitoring their assets, liabilities and investment exposure (capital).
It basically involved the acts of journalizing, posting and balancing the journalized entries in the ledger by way of the double-entry system of recording. However, the procedures culminated with the trial balance preparation since trading during those days was not as complicated as it is today.
The current accounting cycle has progressed beyond the day book, the journal, the ledger and trial balance, which the Franciscan friar devised during the Renaissance Era. Readers will gain insight about the factors that gave rise to the evolution of Fray Pacioli’s bookkeeping system by reading these articles that tell about historical developments in the field of American commerce:
Learn more in this collection of accounting definitions, procedures, tools, methodologies and other related information. Gear-up for a comprehensive exploration of the basic steps being performed and completed as a cycle by starting with the following articles: