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The new cost accounting theory made it possible for a professional bookkeeper or accountant to use the book held to extract financial information to illustrate the usefulness of such data. This fresh idea contributed to the survival of corporations during the depression; a company that would otherwise have collapsed without a cost accounting breakthrough driven by intelligent management decision-making.According to investopedia.com, in the light of its development, accounting theory can be described as examining both the historical foundations of accounting practise and the manner in which the analysis and application of financial principles are checked and applied to accounting practises. Since the 15th century, accounting as a discipline is thought to have existed. Businesses and markets have continued to grow considerably from that time to the present. Accounting theory needs to adapt to modern ways of doing business, new technical requirements and discrepancies found in reporting systems, because it is a topic that is continually changing. The Accounting Standards Board constantly helps establish more effective practical applications of accounting theory, as professional accounting associations assist businesses to interpret and use accounting standards. Accounting is the basis for effective and efficient business management and wise decision-making in management, without which companies and trade worldwide will work blindly and fatally. Therefore, how it has progressed to its future position must be related. Check Accounting Firm.

In 1494, Luca Pacioli wrote a book on Maths (ehow) consisting of a chapter on business mathematics. Since this book is considered to be the first official accounting book, Luca Pacioli has been considered the father of accounting’ in part. Pacioli explained in his Maths book that 3 items were required for the effective merchant: enough cash or credit; an accounting system that can tell him how he is doing; and a good book keeper to run it. The principle of Pacioli still holds today, including both journals and ledgers, and the use of the double entry accounting that had been in place since the late 1300s is thought to have been popularised.