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Bookkeeping is accountancy's masterpiece

26th Aug 2015
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“What a thing it is to see the order which prevails throughout his business! By means of this he can survey the general whole at any time without needing to perplex himself in the details,” wrote Goethe, Germany’s literary grand master. “What advantages does he derive from the system of bookkeeping by double-entry! It is among the finest inventions of the human mind.”

You probably weren’t expecting that quotation to culminate in “bookkeeping by double-entry!”. You’d be wrong to underestimate bookkeeping, though. For hundreds of years, double entry bookkeeping was viewed with esteem and through an almost metaphysical lens. In pre-modern Europe, double-entry bookkeeping had theological and cosmological connotations, recalling “both the scales of justice and the symmetry of God’s world”.

Double entry bookkeeping was a weapon with which to tame the number. As Mary Poovey pointed out in her book A History of the Modern Fact, “In the late sixteenth-century…number still carried the pejorative connotations associated with necromancy…[D]ouble-entry bookkeeping helped confer cultural authority on numbers”.

This mundane, often automated, facet of accounting has a proud intellectual and scientific legacy. The German economist Werner Sombart compared its impact to the “the system of Galileo and Newton…With the same means as these, it orders the phenomenon into an elegant system”.

It also profoundly influenced the modern economy we take as a given. Sombart also argued that “the very concept of capital is derived from this way of looking at things; one can say that capital, as a category, did not exist before double-entry bookkeeping”.

So look upon your history, humble bookkeepers, and rejoice! Your work is a feat of scientific and intellectual derring-do. 

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By petersaxton
26th Aug 2015 16:06

Simple

I don't think double entry bookkeeping is so special.

Any entry on the P&L a/c (unless there's another P & L a/c entry) is matched by an entry on the balance sheet.

This is logical.

Of course it would take some time to develop into a full blown "system" but the principles are quite simple.

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By Brend201
28th Aug 2015 18:26

Quotation incomplete?

The sentence as posted doesn't seem complete.  This is what I found elsewhere, which makes a bit more sense.  And I like the quote too.  

"By means of this he can at any time survey the general whole, without needing to perplex himself in the details."

 

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