Double entry versus charge and discharge accounting in eighteenth-century France

Abstract

An examination of the records of French companies reveals that they used two basic models in the eighteenth century: double entry and charge and discharge accounting. The starting point for this study is an analysis of articles of association. It shows us that the choice of an accounting model was influenced by such matters as the class of shareholder and the traditions and operating conditions particular to each branch of activity. For example, double entry was the merchant's model and was used in the textile industry, where the capital came from trade. On the other hand, charge and discharge accounting was the accounting model of mining and metallurgical enterprises where the capital was injected mainly by the nobility or financiers.1 However, the dominance of stewardship accounting in these sectors is not entirely due to historical tradition. This model was founded on the separation between capital ownership and management and centred on the notions of responsibility, accountability and control, so it satisfied certain requirements observed in the early joint stock companies. But weaknesses became increasingly evident, its validity was questioned, and double entry became accepted as the only usable technique in industry. Its use became widespread during the first half of the nineteenth century. However, this long coexistence with the method adopted from public finances has left its mark.