Double-entry book-keeping

Double-entry book-keeping is the standard accounting practice for recording financial transactions. Its origins have been traced as far back as the 12th century, and by the end of the 15th century, it was widely used by the merchant venturers of Venice. It was codified for the first time by Luca Pacioli, a close friend of Leonardo da Vinci, in a 1494 mathematics textbook http://acct.tamu.edu/smith/ethics/pacioli.htm.

Related Topics:
Accounting - Venice - Luca Pacioli - Leonardo da Vinci

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The system is based on the concept that a business can be described by a number of different variables or accounts, each describing an aspect of the business in monetary terms. Every transaction has a 'dual effect'—increasing one aspect and decreasing another, in such a way that all of the different variables always sum to zero. This is illustrated below.

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