SOLVING THE MYSTERY OF DOUBLE ENTRY BOOKKEEPING

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SOLVING THE MYSTERY OF DOUBLE ENTRY BOOKKEEPING
Solving the Mystery of Double Entry Bookkeeping – Warsono‐bin‐Hardono (swarsono@feb.ugm.ac.id)

SOLVING THE MYSTERY OF DOUBLE ENTRY BOOKKEEPING
1

Sony Warsono-bin-Hardono
Department of Accounting Faculty of Economics and Business

ABSTRACT
Double-entry bookkeeping (DEB) has been shown to be reliable. The first documentation of its usage dates to 1494 and it has been used since then without any significant changes, despite more than half a millennium having passed. From time to time, scholars have marvelled at the utility of DEB and have tried to elucidate the reasoning behind its application, particularly the debit-credit mechanism. Yet despite these efforts, the efficacy of DEB remains an unsolved mystery. Using a mathematical approach, this paper presents evidence that DEB is an application of arithmetic. This mathematical approach is motivated by the mathematical content of Summa de Arithmetica, Geometrica, Proportioni et
Proportionalita, in which DEB was included. Revealing the internal workings of DEB is an important first step towards developing transparent, accurate and comprehensive accounting practices that can meet the increasing demands of stakeholders.
Key words: Double-entry bookkeeping (DEB); Summa; Debit-credit mechanism; Mathematics

1 INTRODUCTION

The rise and metamorphosis of double-entry bookkeeping is one of history’s best-kept secrets and most important untold tales. (Gleeson-White, 2012, p. 8)

Nowadays, the field of accounting is growing rapidly, in terms of both its practice and academic study. Double-entry bookkeeping (DEB hereinafter) has been practised for more than 500 years and forms the foundation of modern accounting (Littleton, 1928; Edwards, 1960). DEB was presented in the book Summa de Arithmetica, Geometrica, Proportioni et Proportionalita
(hereinafter "the Summa"), published in 1494 in Italy. Since its inception, many scholars have marvelled at its efficacy and efficiency. Among them are the

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