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Double-entry bookkeeping: 1340

The clerk keeping the accounts for the Genoese firm of Massari painstakingly fills in the ledger for the year 1340. He does so in a way which seems to double the work. Every transaction is recorded in two separate columns, one representing its effect on the debit side of the company's affairs and the other on the credit side.

The system must be older than 1340, for the Genoese clerk applies it with skill and accuracy in this year. But his ledger is the first example to have survived of a form of accountancy, developed in the banking houses of northern Italy, which proves of great significance in commercial history.

The advantage of double-entry book-keeping, for those with the training to interpret the ledger, is clarity. The two columns show at a glance the nature and effect of transactions which have occurred, together with the resulting profit or loss.

Accounts of this kind can provide the basis for rational business decisions. They also offer a simple check on inaccuracy, for if the entries are correct the two columns will balance. With suitable refinements, the system in use in 14th-century Genoa remains the basis of modern accounting techniques.

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