History of Accounting

Long ago there was a glen surrounded by a cool mountain stream that could only be accessed by crossing an ancient stone bridge. This bridge was the home of a family of trolls that derived their income from the sheep that were driven across the bridge to graze on the grass in the glen by shepherds that worked for surrounding small farms. For each sheep that crossed over the bridge the trolls collected a small fare.

Because the fare was so insignificant, the troll would have to keep records of each sheep and which farm owned it. At the end of each month they could collect for the number of times a farm’s sheep crossed the bridge.

For many years, the trolls kept track by placing small rocks for each sheep in piles that was assigned to particular farms. At the end of the month they would count the rocks and send each farm a bill for each of their sheep that crossed the bridge to graze on the lush grass.

This system worked very well for centuries until one day, the king of the country decided he wanted to build a new palace. His wife decided that she wanted the castle to be built of stone, so he proclaimed that henceforth all loose rocks were to be delivered to his property to be used for his new home.

The trolls were beside themselves! How would they ever be able to manage their business without rocks? Their business would go broke.

Luckily the trolls recalled hearing of a magician that kept track of all of the king’s subjects that passed through fences. (For that was how the King taxed his subjects, each time they went through a gate they were charged a fee!) So the trolls called on the magician to inquire on how he did it.

The mighty magician explained that he maintained a list of all peasants. Each time one went through a gate he would place a mark. These marks were tabulated once a month for each peasant. Then each peasant was handed a “Gate Bill”

The trolls were excited! They wanted lists that would work for them too. So the magician created lists for them and named them “Spread Sheeps”.

And that is how, even to this day, we keep track of sales and receipts.

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