New perspective on the evolution of double-entry bookkeeping

              John J. Williams PENNSYLVANIA STATE UNIVERSITY
A NEW PERSPECTIVE ON THE EVOLUTION OF DOUBLE-ENTRY BOOKKEEPING
Abstract: Inquiry into the origin of double entry accounting has typically focused on form as the causal factor. In the present article the arguments supporting this view are reviewed and challenged by developing the substantive framework of double entry accounting in equation form and linking it to the evolution of mathematics in the Arab-Hindu cultures. The article concludes with specific sug-gestions for obtaining empirical evidence which might support the "substantive hypothesis" as the causal factor of double entry accounting.
One of the great evolutionary advances in the history of account-ing was the conceptualization of "double-entry" and its subsequent manifestation in form and substance. Accounting historians agree that Paciolo's famous treatise of 1494 represents the first complete synthesis of double-entry bookkeeping in published form.1 Substan-tially less agreement exists in the literature on the underlying stim-uli responsible for the "state of the art" prevailing at the end of the fifteenth century.
The methodology employed by accounting researchers in ad-dressing the latter issue is largely inductive and is akin to that of historians in general. By the same token, general observations on the "form" of double-entry bookkeeping as evidence of origin re-quires a deductive approach which is extremely fragile within an historical context. This paper examines, in a brief manner, the ma-jor hypotheses debated in the literature as to the causal factors giving rise to double-entry bookkeeping and offers an alternative explanation in view of the amassed empirical evidence.
Writing in 1494, Paciolo explicitly denied any responsibility for the origin of double-entry accounting and asserted that he was merely "writing down the system" which had been in existence for roughly two hundred years in Venice.2 However, Paciolo apparently did express his acknowledgment to one renown mathematician of this era namely Leonardo da Pisa.3 The possible contribution of this medieval scholar and the genesis of his knowledge appear to have been extremely understated and perhaps omitted entirely as a source of first order importance to the development of double-entry