Double Entry

Accounting by
Luca Pacioli
Purpose : give trader
without
delay
Purpose
information to his
asset and liabilities
3 books used;
(memorandum,
journal, Ledger)
Advised computation
of periodic profit and
Why:
Response to changes
Understand better
Made contribution 3
Ps

4 Phase Development
of Accounting
Principles in USA:

General
Scientific Period
((1800-1955)
Normative
period (19571970)
Positive Era
(1970s)

Oral
and
trust

(Babylo
n,
Assyria
n,
Egyptia
n,

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
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

Development
of Accounting

3,000
BC
Record
keeping

Age of Scientific Accounting

How the period

between the
advent of double
entry and Industrial
revolution was
characterized.

Management
Contribution
Institution
Contribution
Professional

Acc. History

Changes contribute
better :
Pedagogy
-field of accounting
+ social science
Policy
- acc.problem
+institutional
context +public
policy
Practices
-assessment by
making past

Age of
Stagnation

1340
Books
of
Double
entry
method
Massai
of
Genoa Italian

1400015000
Written
form

Acc. Theory

1979
(clacy)
Writing
2nd, early
days
confidenc
e 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
)
Advantage
s:
Writtenlarge firm
Oraldomestic
Practical
for
irregular