Did you ever wonder about the origins of accounting? Possibly not! Did you know that the ‘father’ of double entry accounting was a 15th century Franciscan monk called Luca Pacioli, a teacher and friend of Leonardo da Vinci?
When Pacioli published the principles and methods of double entry accounting in 1504 it went viral within the emerging merchant class. At about the same time, Roman numerals were being replaced by the Arabic system including the concept of zero. This was critical to Pacioli’s method of accounting, balancing assets with liabilities, debits and credits. Without the zero, accounting is just, counting!
Why was accounting so attractive?
- Making a trial balance allowed merchants to check their books for mistakes
- Secondly it was a methodical and orderly system of keeping records
- Double entry bookkeeping was an excellent method for improving the minds of young men – sort of like mental gymnastics!
- Finally it assisted with decision-making, forecasting and planning as it could show individual profit figures for each line of merchandise, not just the total profit figure of a business
For more information see the book “Double Entry: How the Merchants of Venice Shaped the Modern World – and How Their Invention Could Make or Break the Planet” by Jane Gleeson-White.