Tracing the Historical Development of Cost Accounting: A Literature Review

This paper described the early emergence of cost accounting and traced the most prominent features, as recognised by studies conducted by prominent writers and critics. This study attempted to arrive at the dates that have gained the majority's agreement in charting the main paths of the development of cost accounting. This is achieved by surveying studies in the accounting literature, that have particularly provided evidence of the origins of cost accounting. The description process will be distributed into three key periods. The first period, bridging the fourteenth to the sixteenth centuries, emphasises principal progresses. The unearthing of records from protuberant medieval corporations that echoed early marks of cost accounting. The rise of industrialised ancestors and increasing trade in Germany, England and Italy are other features of the first period, which have led the disposition towards cost information. The second period, starting from the 17th till the 18th century, witnessed the rapid emergence of tracking engineering industries and the unprecedented demand for, consumption, production costs, raw materials. During this period, the snowballing competition has led landlords and equally trade holders to pursue precise unit costs to reserve their market share and start setting competitive prices. The third period, from the 19th to the middle of the 20th century, witnessed the growth of industrial accounting informed by the prevalent execution of machinery during production. While this era has pondered cost estimation as a focal point for scientific management, the expansion of cost analysis accounts used for measuring cost of goods sold along with determining ending inventory. The predicament of cost allocation also became evident.