Fra Luca Pacioli - The Father of Accounting

History of Accounting > Fra Luca Pacioli, Father of Accounting

During the Italian Renaissance in Venice a man named Fra Luca Pacioli wrote a book titled “Summa”, explaining record keeping and double entry accounting. His book was not only one of the very first books ever published using the Gutenberg press, it was used as an accounting textbook for the next 500 years. The book was so popular that it was later translated into Russian, German, English, and Dutch.

Fra Luca, like so many others at the time was born into a very poor family in 1445, in Sansepulcro Tuscany. He later joined a Franciscan monastery and became an apprentice to a local businessman. He had a craving for knowledge, and tried to learn everything possible from his mentors.

He was also a friend of the great Leonardo da Vinci and wrote many other books on various subjects. Some of them were commerce, mathematics, theology, and military strategy. Today, Fra Luca Pacioli is widely known as “The Father of Accounting”.

Fra Luca was not an accountant himself, and did not create the system he wrote about in his book. At the time Venice was one of the richest nations on earth, due to its sailing fleet that spanned the globe looking for anything of value. The city was home to a large number of extremely wealthy merchants that financed these expeditions.

These businessmen were far too busy enjoying the finer things in life to safeguard their belongings personally, so they hired employees, who later became known as accountants to do it for them. As Venice began to grow and prosper, so did the system that the accountants devised to classify and report their employer’s possessions.

They were the ones that developed many of the very same techniques that are still used today by accountants all over the world. Some of these are the double entry system, and the use of memorandums, ledgers, and journals. Fra Luca Pacioli became so well known, because his book expertly detailed the entire accounting process, making it very easy for almost anybody with a little time on their hands to understand.

Many of the accounts used back then, are virtually identical to the ones used today. These include accounts receivable, accounts payable, assets, liabilities, inventories, expenses, and income. For the accountants that are reading this, you might find it hard to believe, but they even had period ending adjusting entries at this time.

Some of the other subjects discussed in the book were cost accounting, ethics, certification of the books, and a trail balance. The trial balance used at this time, was not that different from the one used today, but it was later reformatted in 1868. The book so completely covered the subject that it was not until the middle of the 20th century that the income statement was created.

Fra Luca Pacioli and the accountants in Venice, were truly men way of ahead of their time. Their efforts and knowledge has contributed greatly to our present society, allowing all of us to live better lives because of them.

VN:F [1.9.22_1171]
Rating: 10.0/10 (2 votes cast)
Fra Luca Pacioli - The Father of Accounting, 10.0 out of 10 based on 2 ratings

Enter you Email and Win!

Sign up for our drawing for an Apple IPhone to help you organize your business contacts, calendar events, and more, by subscribing to our periodic newsletter. Simply add your email below and you will be enrolled. We will never, ever sell or spam your email, and you can cancel at any time!

Cite this page:

Contribute meaningful comments to the Accounting community...