History of Accounting

Monday January 7, 2019

He is credited with creating the double entry system of accounting. From Wikipedia

Summa de arithmetica, geometria. Proportioni et proportionalita (Venice 1494), a textbook for use in the schools of Northern Italy. It was a synthesis of the mathematical knowledge of his time and contained the first printed work on algebra written in the vernacular (i.e., the spoken language of the day). It is also notable for including one of the first published descriptions of the bookkeeping method that Venetian merchants used during the Italian Renaissance, known as the double-entry accounting system. The system he published included most of the accounting cycle as we know it today. He described the use of journals and ledgers, and warned that a person should not go to sleep at night until the debits equaled the credits. His ledger had accounts for assets (including receivables and inventories), liabilities, capital, income, and expenses — the account categories that are reported on an organization's balance sheet and income statement, respectively. He demonstrated year-end closing entries and proposed that a trial balance be used to prove a balanced ledger. He is widely considered the "Father of Accounting". Additionally, his treatise touches on a wide range of related topics from accounting ethics to cost accounting. He introduced the Rule of 72, using an approximation of 100*ln 2 more than 100 years before Napier and Briggs.^[8]

Imagine a world without salt and pepper,not to mention cinamon and rosemary! The Spice Trade was a very big deal.

All of this was inspired by the travels of Marco Polo some 150-200 years earlier.

Professor Elam