The influence of Amatino Manucci
and Luca Pacioli
Fenny Smith
Friday 25 April 2008
Gresham College
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
Mediaeval account books
• Ephemeral
• Often reused
– Scraped and written over
– Incorporated into later books
• If preserved, not under good conditions
Early examples
• Genoa 1340, commune stewards
• Wealth of earlier manuscripts
• Particularly Florence and Tuscany
• Arrigo Castellani transcribed all extant pre1300 prose texts from Florence
• 2 volumes 1952
• Including many account book fragments
Studies
• Federico Melis
• Raymond de Roover
• Basil S. Yamey
• Geoffrey A. Lee
Lee’s survey of 13th 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
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
1211 fragments
1211 fragments
1211 fragments
• 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
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
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
Salon
Farolfi company
Partners
• Giovanni Farolfi
• Compagno Franchi (Pagno)
• Amatino (Matino) kept the books at Salon
• Bacchera Baldovino chief buyer
Farolfi company
Other partners
• Borrino (or Burrino) and Vitale Marsoppi
• Ughetto Buonaguida
• Francesco Cavalcante
also possibly
• Tommasino Farolfi
• Giometto Verdiglione
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)
Farolfi company
Other major customers
• Guillaume de Lambesc (a village
a few miles to the east)
• Gilles Vacquier, a draper in
Salon
• Ghilberto Doni
Farolfi company
Other major customers
• Gaetano (Tano) da Figliano
• Ischiatta della Fiorentina
• Giovanni Giuserani or
Jean Jusserand
Farolfi company
Suppliers
• The Archbishop
• Tano da Figliano
• Giuserani/Jusserand
• Tommasino Farolfi of Mondragon
• Astruc Durand Loncontaire
Farolfi company
Commodities
• Wheat, barley, oats, wine, wool
• Cloth, yarn, dyeing materials
also:
• Exchange
• Lending of money
• Official ban on usury?
Diederne, dì 27 di febbraio anno novantanove; posto ove
doveano avere, al Quaderno de le spese, ne l'8 carte £26 17s 2d
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
Farolfi document
The first half of the ledger
contained accounts for
• Debtors
• Expenditure
• Debit side of the head office account (the
balance account)
Farolfi document
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
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.
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
The other ledgers
Cloth Ledger
• Cloth analogy to the Red Book
Expenses Ledger
• Accounts relative to fixtures
• Current expenses
Cash Book
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
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
Rent
• One year later on 17 May
• One year’s rent: £4
• Credited to the rent account and debited to
Current Expenses
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
Sophistication
• Extensive cross referencing
• Accounts are “Personal”
• “Real”
– Goods and for Rent
• “Nominal”
– Fixtures
– Current Expenses
– Expenses of Eating and Drinking
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
Luca Pacioli
Luca Pacioli
• Born around1445
• In Borgo San Sepolcro
• Piero della Francesca
Biography
Biography
• Urbino
• Piero della Francesca
Biography
Historical Perspective
•
•
•
•
•
•
•
300 year tradition since 1202
Leonardo Fibonacci’s “Liber abaci”
adopted by Italian merchants
maestri d’abaco, libri d’abaco
Late 13th C
15 from the 14th C
over 100 from the 15th
Abacus books
Northern Europe
• Still using counters in 18th C
• Continuous use since ancient times
• First printed arithmetics teach both
counters and figures:
• Robert Recorde 1544
• Adam Riese from 1522
Margarita Philosophica
De Scripturis
Contents
•
•
•
•
•
Inventory
Memorandum
Journal
Ledger
How to enter various transactions in the
books
• Various other accounts
• Closing or balancing
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”
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
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
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”
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
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
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
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
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
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
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
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)
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
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
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
Questions?