Meant trusting a boatman with their goods. They had to ship their merchandise up and down the rivers, and that And what happens next will directly lead to the invention of bothĪt that time, merchants faced many of the same problems businesses face today. ![]() Writing and numbers would be not be invented for about another 5,000 years. This area contains the Tigris Euphrates river valley, a large fertile area 10,000 years ago with a large thriving population and active trading between towns and cities up and down the two rivers. A Brief History of AccountingĪccounting was born before writing or numbers existed, some 10,000 years ago, in the area known as Mesopotamia, later Persia, and today the countries of Iran and Iraq. Sales are typically made in a similar fashion, called Accounts Receivable. Businesses usually purchase their supplies and merchandise on aģ0-day account, known as a trade account, or Accounts Payable. Many, and perhaps most, transactions in a business take place on a credit basis. Marble tablet: Account of Disbursements of the Athenian State c. These are all considered part of the Cash account. It is more common, and safer, to use a checking account for routine purchases. (Adjusting and closing entries are an exception and not typical, and represent special entries made by accountants to prepare financial statements, and reset certain accounts at the end of a fiscal year.) Sometimes a transaction involves cash directly, at the time of the event, such as a cash sale at a grocery store. Money eventually changes hands in almost all transactions, either at the time of the transaction, or perhaps at a future date in the case of items purchased on credit.
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