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The influence of Amatino Manucci and Luca Pacioli Fenny Smith Friday 25 April 2008 Gresham College.

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Presentation on theme: "The influence of Amatino Manucci and Luca Pacioli Fenny Smith Friday 25 April 2008 Gresham College."— Presentation transcript:

1 The influence of Amatino Manucci and Luca Pacioli Fenny Smith Friday 25 April 2008 Gresham College





6 Pacioli’s Summa Intended to teach commercial skills Part of a 300 year tradition Following Leonardo Fibonacci (1202) Treatises, schools, curricula No formal bookkeeping training Existing ledgers

7 Mediaeval account books Ephemeral Often reused –Scraped and written over –Incorporated into later books If preserved, not under good conditions

8 Early examples Genoa 1340, commune stewards Wealth of earlier manuscripts Particularly Florence and Tuscany Arrigo Castellani transcribed all extant pre- 1300 prose texts from Florence 2 volumes 1952 Including many account book fragments

9 Studies Federico Melis Raymond de Roover Basil S. Yamey Geoffrey A. Lee

10 Lee’s survey of 13 th C. ledgers and his 6 DE components 1.The business as an independent accounting entity 2.Algebraic opposition 3.Single monetary unit 4.Proprietor’s equity 5.Profit or loss as net equity change 6.Measure of profit and loss over an accounting period

11 Early Florentine ledgers Unknown Florentine Banking firm, 1211 Gualtieri dal Borgo, guardian of the sons of Rinieri Ugelletti, 1259-67 Two ledgers of Bene Bencivenni, 1262-75 and 1277-96 Estate of Baldovino, son of Jacopo Riccomanni, 1272-8 Gentile de’ Sassetti and Sons, 1274-1310

12 1211 fragments


14 The firm is clearly distinguished from outsiders There is algebraic offsetting of various kinds All entries are in Pisan currency with many intricate conversions in a variety of Italian and international coin

15 The other early Florentine ledgers Gualtieri dal Borgo, guardian of the sons of Rinieri Ugelletti, 1259-67 Two ledgers of Bene Bencivenni, 1262-75 and 1277-96 Estate of Baldovino, son of Jacopo Riccomanni, 1272-8 Gentile de’ Sassetti and Sons, 1274-1310

16 Amatino Manucci Partner in Florentine firm of Giovanni Farolfi Based at Nîmes Branches in a number of towns in the area Including Salon Manucci kept the accounts We have those from 1299-1300


18 Salon

19 Farolfi company Partners Giovanni Farolfi Compagno Franchi (Pagno) Amatino (Matino) kept the books at Salon Bacchera Baldovino chief buyer

20 Farolfi company Other partners Borrino (or Burrino) and Vitale Marsoppi Ughetto Buonaguida Francesco Cavalcante also possibly Tommasino Farolfi Giometto Verdiglione

21 Farolfi company Major customers Rostang de Capre Archbishop of Arles Bertrand des Baux of Avellino to the north of Arles (not directly a customer of the company but often mentioned with the Archbishop in the accounts: good PR for the company)

22 Farolfi company Other major customers Guillaume de Lambesc (a village a few miles to the east) Gilles Vacquier, a draper in Salon Ghilberto Doni

23 Farolfi company Other major customers Gaetano (Tano) da Figliano Ischiatta della Fiorentina Giovanni Giuserani or Jean Jusserand

24 Farolfi company Suppliers The Archbishop Tano da Figliano Giuserani/Jusserand Tommasino Farolfi of Mondragon Astruc Durand Loncontaire

25 Farolfi company Commodities Wheat, barley, oats, wine, wool Cloth, yarn, dyeing materials also: Exchange Lending of money Official ban on usury?


27 Diederne, dì 27 di febbraio anno novantanove; posto ove doveano avere, al Quaderno de le spese, ne l'8 carte - £26 17s 2d

28 Farolfi document Archivio di Stato in Florence 56 leaves, sequentially numbered Missing: –47 from beginning –half a dozen in the run –unknown number from the end Occasional pages stuck together Castellani had to use a mirror

29 The first half of the ledger contained accounts for Debtors Expenditure Debit side of the head office account (the balance account) Farolfi document

30 The second half of the ledger contained accounts for Creditors Profit Credit side of the balance account credit and debit would be compared for balancing Farolfi document

31 The other ledgers White Ledger Similarly divided into two halves General Ledger acting as a continuation No closing balance account General Ledger has no opening one.

32 The other ledgers Red Book Main merchandise accounts Similarly divided into two halves Purchases in the front, sales at the back Closing balances were transferred to the debit of the balance account in the General Ledger

33 The other ledgers Cloth Ledger Cloth analogy to the Red Book Expenses Ledger Accounts relative to fixtures Current expenses Cash Book

34 Subsidiary ledgers Plush Book partner Borrino Marsoppi business expenses total debited to Expenses and credited to Borrino’s account Memorandum Ledger Similarly for the other partners

35 Rent Four accounts for prepaid rent on various premises £16 was paid to Pierre Guillaume on 17 May 1299 Four years’ rent in advance for a warehouse Sum transferred from the White Ledger to the debit of the rent account

36 Rent One year later on 17 May One year’s rent: £4 Credited to the rent account and debited to Current Expenses

37 Other rent For advance rent of £12 for a shop, £3 written off after a year For £1/10/- for one year for another warehouse, all written off For £12 paid in advance for three years on 6 October 1297 for a second shop Remaining balance of £4 was transferred in the same way

38 Sophistication Extensive cross referencing Accounts are “Personal” “Real” –Goods and for Rent “Nominal” –Fixtures –Current Expenses –Expenses of Eating and Drinking

39 Balancing and equity Evidence that Manucci balanced accounts We can’t check: Only debit side extant References to credit side show that it followed straight after extant pages Lee did a lot of detective work on existing entries Clear that Manucci’s system had the means for checking

40 Luca Pacioli

41 Born around1445 In Borgo San Sepolcro Piero della Francesca


43 Biography

44 Urbino Piero della Francesca

45 Biography

46 Historical Perspective 300 year tradition since 1202 Leonardo Fibonacci’s “Liber abaci” adopted by Italian merchants maestri d’abaco, libri d’abaco Late 13 th C 15 from the 14th C over 100 from the 15th

47 Abacus books

48 Northern Europe Still using counters in 18 th C Continuous use since ancient times First printed arithmetics teach both counters and figures: Robert Recorde 1544 Adam Riese from 1522


50 Margarita Philosophica

51 De Scripturis

52 Contents Inventory Memorandum Journal Ledger How to enter various transactions in the books Various other accounts Closing or balancing

53 Inventory Given with an example Should be completed in one day As detailed as possible This helps the merchant to be vigilant about his business transactions –“There are more bridges to cross to make a good businessman than to make a Doctor of Laws” –“The Law helps those that are awake, not those that sleep”

54 The three books Memorandum, Journal and Ledger Described with examples Warning: Have the books officially examined For many people keep duplicate sets of books, and show one set to the buyer and the other to the seller

55 Entering transactions Different ways of purchasing goods –cash, time, exchange of goods, and by draft –various combinations of these Dealing with public offices –Municipal Bank in Venice –Office of Exchange Keep careful accounts with banks as the clerks can sometimes mix up the accounts

56 Office of Exchange Brokerage fee Split between the buyer and the seller Worked example on recording in the books, using 4% as the fee Proverb: “If you do nothing, you make no mistakes, and if you make no mistakes you do not learn”

57 More guidance business trips separate stores payment by draft or through the bank or both: –safer to deliver the draft first, and then to settle through the bank exchange of goods bills of exchange

58 Partnerships Record all details in the Memorandum: –partnership’s objective –how long it is intended to last –who is to be employed –the partners’ respective investments and shares –assets and liabilities assumed by the partnership –careful segregation of the partnership in the Ledger

59 Different expense accounts Ordinary and extraordinary household accounts Business expenses Employees’ wages Ordinary expenses: –Food, wine, clothing, services, household goods Extraordinary expenses: –What you might spend in gaming, or money that might be lost or stolen, or lost at sea or through fires

60 Other essentials Income and Expense account Profit and Loss account carrying books forward correcting mistakes closing or balancing of accounts –the trial balance –interim transactions

61 Last essentials Ledgers should be closed every year “Frequent accounting makes for lasting friendship” Keeping of correspondence Summary of the rules for keeping a ledger Important kinds of transactions to be –entered in the Memorandum –recorded in the Journal –posted to the Ledger

62 Assessment Many inconsistencies Not an ideal first text for a learner No sample set of accounts But: Second edition 1523 Copied (and acknowledged) by Cardano and Tartaglia

63 Dependencies on De Scripturis Domenico Manzoni Quaderno doppio (Venice, 1540) –based to a large extent on Pacioli’s –tidied up –how to correct badly kept account books –set of illustrative accounts

64 Dependencies on De Scripturis Jan Ympyn Nieuwe instructie (Antwerp1543) –kept closely to the de Scripturis –Improved treatment –illustrative set of account books Editions in French (1543) English version by Grafton (1547)

65 Dependencies on De Scripturis Hugh Oldcastle’s A profitable treatyce (1543) –borrows very closely from de Scripturis –does not contain a model set of accounts Schweicker’s Zwifach Buchhalten (1549) –derivative of Manzoni’s work and he nce indirectly on the de Scripturis

66 Later treatises on accounting Increased in number Showed increasing variety in subject matter and treatment Pacioli’s name continued to be remembered 19th century: ‘ the father of double entry bookkeeping Pacioli 2000 – late 1990’s software

67 Conclusion Two important figures in the history of double entry bookkeeping Neither can be credited with its invention Both had their part to play Manucci was a steady practitioner Pacioli was a flamboyant teacher

68 Questions?

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