Using accounting history and Luca Pacioli to put relevance back into the teaching of double entry

Abstract

Double entry bookkeeping is generally considered to be a topic that students struggle to learn. In part, this is seen as being due to their lacking awareness of both business processes and of the business environment in which accounting operates, which makes double entry appear an abstract concept and one they find hard to justify the effort of learning. It is also seen by many faculties as failing to encourage critical thinking; and as a purely mechanical process that is unnecessary in a university degree in accounting - that it belongs in the professional office where it can be taught in context in the work environment. This paper argues that there is an alternative justifiable view that, far from being unnecessary and failing to encourage critical thinking, knowledge and understanding of double entry is a key element required of anyone who seeks to fully engage in critical thinking concerning the validity of accounting information. It argues that double entry should be retained in the undergraduate accounting curriculum - that its absence from the curriculum encourages blind acceptance of accounting information as 'truth' and makes it more difficult to encourage accounting students to think critically about accounting information at later stages of their studies. This paper suggests that by adopting an accounting history-based approach, students can be presented with a context that may overcome their traditional failure to grasp the topic well at an early stage in their accounting studies. To support this claim, the paper suggests themes that could be covered when introducing the topic, suggests sources of teaching material, and offers access to historical background material concerning the 'father of accounting', Luca Pacioli, in order to assist faculties that wish to try it for themselves in the classroom.Pacioli, double entry bookkeeping, accounting history,

Using Pacioli’s pedagogy and medieval text in today’s introductory accounting course

“…With respect to that text, Sangster, Stoner and McCarthy (2007, 455) suggest that, "by noting and adopting [the] features found within the bookkeeping treatise, faculty… may better engage their students, and so make students' learning experience more productive and long-lasting." Sangster (2010) goes further, suggesting that Pacioli's treatise, and the instructional method -the pedagogy -it embraces, be adopted as the basis of instruction for the subject of double entry bookkeeping.…”

“…It comprises of the basic rules and procedures enacted in order to maintain accurate and faithful financial records of a business. While the computerization of accounting systems places far less emphasis upon accountants needing to know and understand double entry in order to record transactions, being able to understand and explain entries made into accounting systems does require such knowledge and understanding (Sangster 2010). Double entry is not something accountants can ignore and it is not, therefore, a topic that can justifiably be ignored in accounting degree programs.…”

On Double-Entry Bookkeeping: The Mathematical Treatment

“…For instance, it may well be that Pacioli implicitly assumed a complete set of accounts (so the double-entry principle would always hold) without seeing those accounts as coming from an equation such as today's balance sheet equation (Sangster 2010). 5 The double-slash notation was suggested by Pacioli.…”

The Ecological Rationality of Historical Costs and Conservatism

“…Mises (1920) argued famously that socialism is doomed to fail because it cannot draw on what he called "capital accounting." 1 The roots of accounting, as it is known today, go back at least to medieval Italy where, in 1494, Luca Pacioli published the first printed description of double-entry bookkeeping, as practiced in the prosperous Italian cities of his time (Hatfield, 1924, p. 6ff;Zan, 1994, p. 263;Sangster, 2010).…”