Luca Pacioli's Double-Entry System of Accounting - A Critique

Abstract

What we know today as double entry bookkeeping is traceable to a man called Luca Pacioli, the author of the world’s first printed book-keeping treatise. As the origin of all subsequent book-keeping treatises throughout Europe, Luca Pacioli’s book-keeping tract is not only the source of modern accounting, but also ensured that the medieval Venetian method itself survived into our times. However, this study is aimed at critically examining the emergence of the double entry system of accounting by reviewing what past scholars and researchers have done in relation to the subject matter. This is to say that a comprehensive review of accounting literature in relation to double entry system of accounting was carried out to do justice to this study. And it was gathered that double entry bookkeeping existed amongst the early Italian merchants before Pacioli came into the scene. But the practice prior to the fourteenth and fifteenth centuries was rather crude because there were no formally documented principles to be followed. So the outburst of Pacioli in the fifteenth century recorded a landmark in the development of this all-embracing accounting system. The first ever published treatise about double entry bookkeeping was that of Luca Pacioli in his book titled “Summa de Arithmetica, Geometria, Proportioni et Proportionalita”. This book became the road map for the development of double entry system of accounting. Therefore, away from the conclusions of the majority of authors and scholars in the accounting literature that Luca Pacioli is the father of accounting, he should rather be referred to as the father of modern accounting, having laid the milestone for the codification, development, preservation, and sustenance of double entry system of accounting.

Keywords: Double Entry, Bookkeeping, Accounting Principles, Accounting System.

1. Introduction

2.1 The Evolution of Double Entry System of Accounting

2.2 The Development Of Double Entry System Of Accounting

2.3 The Contribution Of Luca Pacioli To The Development And Spread Of Double Entry System of

       Accounting

2.4 Critical Review Of Luca Pacioli’s Work Vis-à-vis Its Impact On The Accounting Practice Of His

       Time

2.5 The Corollary Of Double Entry System Of Accounting

3. Summary and Conclusion