Luca Pacioli

The Father of Accounting

Tina S
Tina S
Nov 10, 2009
1 Comments | 2610 Views | 1 Hits

Fra Luca Bartolomeo de Pacioli (sometimes Paciolo) (1446/7–1517) was an Italian mathematician and Franciscan friar, collaborator with Leonardo da Vinci, and seminal contributor to the field now known as accounting.
The young Pacioli had always loved mathematics though, and he soon abandoned his apprenticeship to work as a mathematics scholar.

Because Pacioli was a Franciscan friar, he might be referred to simply as Friar Luca. While Friar Luca is often called the "Father of Accounting," he did not invent the system. Instead, he simply described a method used by merchants in Venice during the Italian Renaissance period. His system included most of the accounting cycle as we know it today. For example, he described the use journals and ledgers, and he warned that a person should not go to sleep at night until the debits equalled the credits! His ledger included assets (including receivables and inventories), liabilities, capital, income, and expense accounts. Friar Luca demonstrated year-end closing entries and proposed that a trial balance be used to prove a balanced ledger. Also, his treatise alludes to a wide range of topics from accounting ethics to cost accounting.

The year 1494 is the only date during Pacioli's life that is absolutely certain. Pacioli was about 49 years old in 1494 - just two years after Columbus discovered America - when he returned to Venice for the publication of his fifth book, Summa de arithmetica, geometria, proportioni et proportionalita (The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality). It was written as a digest and guide to existing mathematical knowledge, and bookkeeping was only one of five topics covered.
The Summa's 36 short chapters on bookkeeping, entitled De Computis et Scripturis (Of Reckonings and Writings) were added "in order that the subjects of the most gracious Duke of Urbino may have complete instructions in the conduct of business," and to "give the trader without delay information as to his assets and liabilities"

Pacioli wrote the Summa in an attempt to redress the poor state of mathematics teaching in his time. One section in the book made Pacioli famous.
The section was Particularis de Computis et Scripturis, a treatise on accounting. De Scripturis was later described by some as "a catalyst that launched the past into the future."(Luca Pacioli: Unsung Hero of the Renaissance) Pacioli was the first person to describe double-entry accounting, also known as the Venetian method.

This new system was state-of- the-art, and revolutionized economy and business. The Summa made Pacioli a celebrity and insured him a place in history, as "The Father of Accounting." The Summa was the most widely read mathematical work in all of Italy, and became one of the first books published on the Gutenberg press.

Numerous tiny details of bookkeeping technique set forth by Pacioli were followed in texts and the profession for at least the next four centuries, as accounting historian Henry Rand Hatfield put it, "persisting like buttons on our coat sleeves, long after their significance had disappeared." Perhaps the best proof that Pacioli's work was considered potentially significant even at the time of publication was the very fact that it was printed on November 10, 1494. Guttenberg had just a quarter-century earlier invented metal type, and it was still an extremely expensive proposition to print a book.

Accounting practitioners in public accounting, industry, and not-for-profit organizations, as well as investors, lending institutions, business firms, and all other users for financial information are indebted to Luca Pacioli for his monumental role in the development of accounting.

Keywords: Fra Luca Bartolomeo de Pacioli,Italian mathematician,Father of Accounting,1494,Summa de arithmetica,Particularis de Computis et Scripturis,accounting practice.

Comments on this article

Zakir, Hossain ,, Photos, Picture, Album

Zakir Hossain : Nicely done!

Nov 12, 2009 at 11:19 PM, Thursday  

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