What Is Double-Entry Bookkeeping?

Duplicate bookkeeping is the symmetry of "single bookkeeping." Bookkeeping with double entry bookkeeping. Double-entry bookkeeping is a bookkeeping method that simultaneously registers each economic business with two or more related accounts corresponding to each other at an equal amount. It was born in Italy in the 12th-15th centuries. It was first popular in Florence and later popular in Venice. At the time it was called the "Italian Borrowing Method" or "Italian Bookkeeping". With the transfer of the World Trade Center, Britain in the 18th century established the so-called "English bookkeeping" on the basis of "Italian bookkeeping." After that, "double-entry bookkeeping" became a term that became popular. China introduced double-entry bookkeeping in the late Qing Dynasty. As the basis of modern accounting, the scientific principles of double-entry bookkeeping apply not only to manual accounting data processing, but also to computer accounting data processing. ^[1]

Double bookkeeping

Right!

Duplicate bookkeeping is the symmetry of "single bookkeeping." Bookkeeping with double entry bookkeeping. Double-entry bookkeeping is a bookkeeping method that simultaneously registers each economic business with two or more related accounts corresponding to each other at an equal amount. It was born in Italy in the 12th-15th centuries. It was first popular in Florence and later popular in Venice. At the time it was called the "Italian Borrowing Method" or "Italian Bookkeeping". With the transfer of the World Trade Center, Britain in the 18th century established the so-called "English bookkeeping" on the basis of "Italian bookkeeping." After that, "double-entry bookkeeping" became a term that became popular. China introduced double-entry bookkeeping in the late Qing Dynasty. As the basis of modern accounting, the scientific principles of double-entry bookkeeping apply not only to manual accounting data processing, but also to computer accounting data processing. ^[1]

(1) According to the results of the account records, you can understand the ins and outs of each economic business;

(2) Trial balance can be performed on the results of the account records to check the correctness of the account records.

"There is a loan, there must be a loan, and borrowing must be equal"

Any economic business must be registered in two or more interconnected accounts for the same amount.

For each economic business, the opposite increase and decrease in borrowings should be recorded.

Although accounting originated very early, accounting in the modern sense should begin when people learn to double-entry bookkeeping to record economic activity. Duplex bookkeeping is a product of the Renaissance era and a clever scientific accounting system. Since it was promoted and applied, it has been praised by celebrities from all walks of life. German poet, writer, and philosopher Goethe described double-entry bookkeeping as "one of the wonderful creations of human wisdom, and every savvy businessman must use it for his business activities." Mathematician Cayley believes that the double-entry bookkeeping principle is "as perfect as Euclidean's ratio theory". Economic historian Sombart said: "The spirit of creating double-entry bookkeeping is the spirit of creating Galileo and Newtonian systems." Maybe the accountant Kurosawa's description is a bit exaggerated but deep and specific. He wrote in "Revised Bookkeeping Principles": "Before the emergence of double-entry bookkeeping, there was no concept of the so-called" capital "in the world. Or, if there is no double-entry bookkeeping, there will be no" capital "." He also said: At the same time, double-entry bookkeeping also created the concept of a capitalist "enterprise." Kurosawa's evaluation of double-entry bookkeeping is mainly based on the opinions of western scholars. But he all agreed. The so-called double-entry bookkeeping can create the concepts of "capital" and "enterprise", of course, with a literary exaggeration. This is just to say that it is actually through capital and other accounts in double-entry bookkeeping that it is possible to grasp capital quantitatively and concretely confirm the existence of an enterprise as an operating entity. As Marx pointed out: the value of capital "would go through different forms of existence as it circulates. The identity of this capital value itself is confirmed in the books of the capitalist or in the form of calculating money".

It is no accident that people praise double-entry bookkeeping. It lasted 500 years and still forms the backbone of modern accounting records, proving that its science has withstood a long historical test. The well-known Japanese accountant Xiong Jingxi made a comprehensive and profound exposition of the advantages of double-entry bookkeeping. He said: "People often talk about the strengths of double-en-try bookkeeping only from the point of view, saying that it can reduce errors by counting and checking twice. It is far from true. In single mode Under bookkeeping, the status quo of a company can only be represented by a set of current wealth accounts. Duplex bookkeeping forces people to "calculate" the status quo with a proper set of capital accounts. The capital account records the past that led to the status quo Business. So account-ability is at the core of double-entry bookkeeping. " "More importantly, under the double-entry system, accounting from the past is not done accidentally and randomly, but completely and systematically, because otherwise The two parties lost their balance. The most basic contribution of the double-entry bookkeeping system is that it exposes managers and accountants to this pressure and must account for changes in wealth. "Another Japanese accountant also said: the essential function of double-entry bookkeeping It is the "measurement of period profit and loss". Although double-entry bookkeeping appeared before the advent of the capitalist era, it prepared a perfect economic information system for the advent of the capitalist era. No wonder some people say, "Without double-entry bookkeeping, I am afraid that capitalism cannot be established."

Duplicate bookkeeping has an indelible contribution to the development of the commodity economy. If double-entry bookkeeping is compared with the clock, microscope, and metal movable type printing technology invented in the Renaissance, it is well deserved. However, when and where did double entry bookkeeping originate and who invented it is still a mystery. Of course, accounting historians hope that through the excavation and evaluation of cultural relics, this problem will eventually be clarified. Because in the fifteenth century, an outstanding mathematician and thinker in Italy, Luca Bagchiale, organized, summarized, and developed this precious spiritual wealth created by humans in a timely manner. It is perfectly preserved and introduced to Europe and the world.

The double-entry bookkeeping went through about three hundred years from its infancy to its completeness. The earliest form popular in Florence was limited to recording claims and debts; later books used in Genoa have expanded the bookkeeping objects to commodities and cash. A more complete double-entry bookkeeping is a popular method in Venice. Venice's bookkeeping, in addition to recording claims, debts, commodities and cash, has established "profit and loss" and "capital" accounts. The double-entry bookkeeping promoted by Luca Bachelle was the Venetian bookkeeping in its most perfect form at the time. The basic principles and rules of double-entry bookkeeping that we still follow today are almost included in the book-keeping theory (accounting theory) of Luca Bagchiara. If it is said that the double-entry bookkeeping represented by Venice's bookkeeping is a remarkable creation, then Luca Bachziale has recreated it. He not only described the bookkeeping system, bookkeeping methods and records of the main business in Venetian double bookkeeping in a simple and detailed manner, but also summarized and refined it as necessary. He reproduced the essence of double bookkeeping principles and methods in his works. . For example, the idea that the purpose of bookkeeping is to provide businessmen with information on assets, liabilities, and profits and losses in a timely manner; treat partnerships as an "accounting entity", and require that all cash, real estate, and receivables owned by partners be The idea that the relevant asset account should be debited, and that the partner's capital account should be credited at the same amount, has been explicitly or implicitly reflected in its accounting theory. Even due to the historical limitations of the time and the special economic conditions such as the existence of multiple currencies in the medieval Italian cities, it was impossible and impossible for Baqiale to explicitly propose accounting such as business continuity, accounting instalment, and a unified currency as the unit of account. Concept, while he still talks about the annual issue of accounting when closing the ledger, and requires that the type of currency and its conversion value be recorded in detail when registering the journal. These issues have inspired future generations and left room for further improvement, improvement and development of double-entry bookkeeping.

So far, modern accounting is inseparable from double-entry bookkeeping, and double-entry bookkeeping is inseparable from Luka Bach'ar. As long as there is a little common sense in accounting history, everyone knows that the name of Baqial is closely linked to double-entry bookkeeping and modern accounting based on double-entry bookkeeping. It may still be debated whether Bachelor's accounting theory is the first book to describe double-entry bookkeeping, but no matter what the conclusion is, there will be no harm to Bachelor's popular accounting work in the history of accounting development. Status and its huge and far-reaching impact. As a "father of modern accounting", Bakire is well deserved. As several accountants in the United States valued him: "Remember that in 1494, accountants should not have any difficulty, because this time is close to 1492. And 1492 was the year that Columbus discovered the new continent. In the history of the development of accounting, 1494 was a time of great significance-not because it represented the birth of bookkeeping, but because of the publication of the first book on bookkeeping in Italy in that year. "" In Venice in 149.4 by Luca Bagchiale The published "Arithmetic, Geometry, Ratio, and Proportion Summary" is the first book to describe the double-entry bookkeeping system and provide accounting records arguments. Its use was extended throughout Europe. "" Luca Bachial is considered the father of modern accounting because his (described) Venetian method subsequently became a textbook model for more than two hundred years. "" Needless to say, the book "Arithmetic, Geometry, Ratios, and Proportions" published by Luca Bachelle in Venice in 1494 is a milestone for double-entry bookkeeping. nature."

His works have been translated into English, German, French, Russian, Japanese, and Italian. It is widely spread in countries around the world. In China, there is no complete Chinese translation yet. People in China's accounting circles, regarding the name of Luca Bakire, and the book "Arithmetic, Geometry, Ratio, and Proportion" containing his double-entry bookkeeping, are also important times in the history of accounting development in 1494. It is quite familiar, but the majority of accountants have not had the opportunity to read the original work of Bachelor on double-entry bookkeeping, which is a pity!

Thank you, Professor Akira Nishimura, Department of Economics, Kyushu University, Japan. After we established a friendship through academic exchanges, Cheng gave him a copy of the book "Accounting Theory of Baqial" from the library of Kyushu University. This book is a 37-chapter full text of calculations and records by Barge Aller, translated by Dr. RG Brown and Dr. KS Johnston in modern English, and three other parts. The three parts are as follows: First, the portrait of Baqial and its description. This portrait is a photocopy of a famous painting collected in the National Museum of Naples, Italy. The reason why this portrait of Baqiale is precious is not only because of the vividness of the portrait, which reflects the style of Baqiale before his death, but also because of the original book clipped on the desk of Baqiale in the picture. , Geometry, Ratio and Proportion. " The second is a detailed introduction to the life of Baqial and his writings. From the introduction, we learned that Paqiale had friendly exchanges with some famous figures of the same period. They were active on the historical stage of the Italian Renaissance and made their respective contributions to European and world civilizations. Thirdly, the book is accompanied by the full text of the original Latin of Baqial. This is also a document of historical value.

In order to make this masterpiece known to the public as soon as possible, three young comrades, such as Lin Zhijun, Li Ruoshan, and Li Songyu, translated it into Chinese with great interest. After the preliminary school by Dr. Lin Zhijun, Professor Chang Xun Detailed proofreading. I'm just an enthusiastic sponsor of translating this book.

The double-entry bookkeeping we have seen, no matter in terms of principle or technology, it is more complete, scientific, and sophisticated than the fifteenth-century Venetian bookkeeping. I have no doubt how many times it is. It is worthwhile to open up the work of Baqial five hundred years ago and explain the most basic principles and basic procedures of bookkeeping. It can be seen that the number can not forget the ancestors. An important feature of science and technology is its inheritance.