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History Of Accounting

1. An Italian Friar, Luca Pacioli, recorded the bookkeeping system of double entry accounting (see the Google book translations link below) in 1494. Pacioli used the Latin terms Debere and Credre in the bookkeeping system. The Latin was translated to English as Debit and Credit.
   • From Chapter 36 of Pacioli's Treatise All the creditors must appear in the Ledger at the right hand side, and all the debtors at the left. All entries made in the ledger have to be double entries—that is, if you make one creditor, you must make some one debtor. Each debit (shall give—dee dare) and credit (shall have—dee havere) entry must contain three things, namely: the day, the amount and the reason for the entry.
   • The use of the term "Credre" (Credit) on a balance sheet are the amounts owed to others. These creditors include Accounts Payable (to vendors), Loans Payable (to banks), or Bonds Payable.
   • The term "Debere" (Debit) on a balance sheet are the amounts owed to the business by debtors. For example, Accounts Receivable or Notes Receivable.

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