Double Entry Accounting by

Luca Pacioli
Purpose : give trader
without delay information
to his asset and liabilities
Purpose
3 books used;
(memorandum, journal,
Ledger)
Advised computation of
periodic profit and closing of
books.

Why:
Response
to changes
Understan
d better
Made
contributi
on 3 Ps

4 Phase Development of
Accounting Principles in USA:

Management Contribution
Institution Contribution
Professional Contribution
Political Contribution

General Scientific
Period ((1800-1955)
Normative period
(1957-1970)
Positive Era (1970s)
Behavioral Research
(1980s)

Age of Scientific Accounting

How the period between

the advent of double
entry and Industrial
revolution was
characterized.

The Industrial Revolution in England posed

new problems for accountants such as
valuation of fixed asset being settled by
adopting concepts of prudence , oing
concern, matching and historical cost less
depreciation as a standard measurement.

Defines:
Principles provides
general frame of
reference which acc.
Practice can guide
practices and
procedures.

Explanation on what actually being done rather than

taking logic practice
Focus on what should be done to achieve objective
Extended of GSP. Explains accounting practice being
observed
Response and reactions towards accounting figures.

Development of
Accounting

Acc.
History

Changes contribute better :

Pedagogy
-field of accounting +
social science
Policy
- acc.problem
+institutional context
+public policy
Practices
-assessment by making
past comparison
(problems + shortage)

Age of Stagnation

Oral and
trust

3,000 BC
Record
keeping
(Babylon,
Assyrian,
Egyptian,
chinese)

1340
Books of
Double
entry
method
Massai of
Genoa Italian

1400015000
Written
form

Acc.
Theory

1979
(clacy)

Writing 2nd,
early days
confidence
with oath
(fact and
promises)

Why:
Better
understanding
Evaluate and
eliminate
Creation

1989
(Edwards)

Disadvantages:
Roman Numerals
(difficult=add, subtract,
multiply, divide)
Arabic numbers
(easily altered)
Early days
(No profit, expen. +
revenue always same)

1991
(Thompson)
Advantages:
Written-large
firm
Oral- domestic
Practical for
irregular
transaction