Accounting System - What is an accounting system?
While this was previously a paper-based process, most businesses now use accounting software. In an electronic financial accounting system, the steps in the accounting cycle are dependent upon the system itself.
For example, some systems allow direct journal posting to the various ledgers and others do not.
"Do not go to bed before the debits equals the credits"Not only today but historically, it has been important for businesses, individuals and rulers to keep track of income and expenditure, whether it was due to a desire to know if an activity is profitable, or to tax or impose customs.
Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in the Middle East.
The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced.
Today bookkeeping is associated with the double entry principle, described by the Italian friar Luca Pacioli. While Friar Luca is often called the "Father of Accounting," he did not invent the system. Instead, he simply described a method used by merchants in Venice during the Italian Renaissance period. His system included most of the accounting cycle as we know it today. The quotation mentioned above refers to Friar Luca.