In this article, we will learn in-depth about Luca Pacioli-Father of Accounting, and much more.
Father of Accounting
The history of accounting has been thousands of years long. Many individuals have contributed to accounting development. The famous Italian mathematician Luca Pacioli is called the father of accounting and bookkeeping.
Who is Luca Pacioli?
|Full Name:||Fra Luca Bartolomeo de Pacioli|
|Father Name:||Bartolomeo Pacioli|
|Birth Year:||Between 1446 and 1448|
|Birth Place:||Tuscan town of Sansepolcro, Republic of Florence|
|Education:||Completed abbaco education.|
|Moved to Venice:||1464|
|Occupation:||Mathematician, Franciscan Friar, Writer.|
|Famous Book:||Summa de Arithmetica, Geometria, Proportioniet Proportionlita.|
|Death Year:||19 June 1517 (aged 69–70)|
|Death Place:||Sansepolcro, Republic of Florence|
Why Luca Pacioli is called the father of Accounting?
Luca Pacioli published his famous book, “Summa de Arithmetica, Geometria, Proportioniet Proportionlita” (“The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality”) in 1494, which included a 27-page paper on Bookkeeping. In this book, he explained the basic principles of Bookkeeping through the double-entry system.
The first bookkeeping description, known as the double-entry accounting system, used by the Venetian merchants during the Italian Renaissance, is also remarkable. The system that he published included most of the current accounting cycle.
He was the first to talk about the use of journals and ledgers. And he also advised not to finish the work until the debit is equal to the credit.
His ledger included accounts for assets (including receivables and inventories), liabilities, capital, revenue, and expenditures – the account categories that are listed on an organization’s balance sheet and income statement, respectively.
He illustrated year-end closing entries and suggested that a trial balance be used to prove a balanced ledger. Moreover, his treatise draws on a wide variety of similar subjects from accounting principles to cost accounting.
Pacioli significantly changed the accounting practice by defining the double-entry accounting system used in parts of Italy.
This revolutionized how companies managed their activities, allowing improved productivity and profitability.
The accounting section of the Summa was used worldwide until the mid-16th century as the accounting textbook.
For the most part, the concepts of double-entry accounting remain unchanged for more than 500 years. ‘Luca Pacioli is indebted for her pioneering role in advancing accounting by practitioners in the field of public accounting, industry and non-profit organizations, creditors, lending agencies, and business entities as well as all other customers for financial information.
That is why he is known as the father of accounting.
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