Abstract
Based on the work of Jean Fourastie, accountant and economist, this article seeks to show that the origins of double-entry bookkeeping are the result of several successive innovations that appeared in Italian commercial enterprises between the 13th and 14th centuries in response to the development of credit and receivables. The three successful innovations that led to the invention of double-entry bookkeeping are thus analyzed in detail from an accounting and logical point of view. This invention, which will have considerable consequences for the emergence of our modern monetary and banking systems, leads to a precise and efficient definition of value, which we still depend on today, especially to understand financial crises.
Highlights
IntroductionIt was double-entry bookkeeping that allowed the emergence of credit money from the Middle Ages onwards
As this paper asserts, it was double-entry bookkeeping that allowed the emergence of credit money from the Middle Ages onwards
We will see in a specific section the contextual reasons that can be given for this weakening of accounting thought, which are not unrelated to the evolution of contemporary finance
Summary
It was double-entry bookkeeping that allowed the emergence of credit money from the Middle Ages onwards. The invention of the T-shaped client account, with a debit and a credit, the inversion of the cash sign, and the invention, or at least the rigorous and modern definition, of the notion of profit. These three elements, which took almost two centuries to be applied together, define what we call double-entry bookkeeping, and are still the basis of most modern bookkeeping around the world. It was in response to this shortage that the amazing logic of double-entry bookkeeping developed
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