The influence of Amatino Manucci and Luca Pacioli

1
The influence of Amatino Manucci and Luca Pacioli

• Fenny Smith
• Friday 25 April 2008
• Gresham College

2
(No Transcript)
3
(No Transcript)
4
(No Transcript)
5
(No Transcript)
6
Paciolis 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

7
Mediaeval account books

• Ephemeral
• Often reused
• Scraped and written over
• Incorporated into later books
• If preserved, not under good conditions

8
Early examples

• Genoa 1340, commune stewards
• Wealth of earlier manuscripts
• Particularly Florence and Tuscany
• Arrigo Castellani transcribed all extant pre-1300
  prose texts from Florence
• 2 volumes 1952
• Including many account book fragments

9
Studies

• Federico Melis
• Raymond de Roover
• Basil S. Yamey
• Geoffrey A. Lee

10
Lees survey of 13th C. ledgersand his 6 DE
components

• The business as an independent accounting entity
• Algebraic opposition
• Single monetary unit
• Proprietors equity
• Profit or loss as net equity change
• Measure of profit and loss over an accounting
  period

11
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

12
1211 fragments
13
1211 fragments
14
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

15
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

16
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

17
(No Transcript)
18
Salon
19
Farolfi company

• Partners
• Giovanni Farolfi
• Compagno Franchi (Pagno)
• Amatino (Matino) kept the books at Salon
• Bacchera Baldovino chief buyer

20
Farolfi company

• Other partners
• Borrino (or Burrino) and Vitale Marsoppi
• Ughetto Buonaguida
• Francesco Cavalcante
• also possibly
• Tommasino Farolfi
• Giometto Verdiglione

21
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)

22
Farolfi company

• Other major customers
• Guillaume de Lambesc (a village
• a few miles to the east)
• Gilles Vacquier, a draper in
• Salon
• Ghilberto Doni

23
Farolfi company

• Other major customers
• Gaetano (Tano) da Figliano
• Ischiatta della Fiorentina
• Giovanni Giuserani or
• Jean Jusserand

24
Farolfi company

• Suppliers
• The Archbishop
• Tano da Figliano
• Giuserani/Jusserand
• Tommasino Farolfi of Mondragon
• Astruc Durand Loncontaire

25
Farolfi company

• Commodities
• Wheat, barley, oats, wine, wool
• Cloth, yarn, dyeing materials
• also
• Exchange
• Lending of money
• Official ban on usury?

26
(No Transcript)
27

• Diederne, dì 27 di febbraio anno novantanove
  posto ove doveano avere, al Quaderno de le spese,
  ne l'8 carte - 26 17s 2d

28
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

29
Farolfi document

• The first half of the ledger
• contained accounts for
• Debtors
• Expenditure
• Debit side of the head office account (the
  balance account)

30
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

31
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.

32
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

33
The other ledgers

• Cloth Ledger
• Cloth analogy to the Red Book
• Expenses Ledger
• Accounts relative to fixtures
• Current expenses
• Cash Book

34
Subsidiary ledgers

• Plush Book
• partner Borrino Marsoppi
• business expenses
• total debited to Expenses and credited to
  Borrinos account
• Memorandum Ledger
• Similarly for the other partners

35
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

36
Rent

• One year later on 17 May
• One years rent 4
• Credited to the rent account and debited to
  Current Expenses

37
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

38
Sophistication

• Extensive cross referencing
• Accounts are Personal
• Real
• Goods and for Rent
• Nominal
• Fixtures
• Current Expenses
• Expenses of Eating and Drinking

39
Balancing and equity

• Evidence that Manucci balanced accounts
• We cant 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 Manuccis system had the means for
  checking

40
Luca Pacioli
41
Luca Pacioli

• Born around1445
• In Borgo San Sepolcro
• Piero della Francesca

42
(No Transcript)
43
Biography
44
Biography

• Urbino
• Piero della Francesca

45
Biography
46
Historical Perspective

• 300 year tradition since 1202
• Leonardo Fibonaccis Liber abaci
• adopted by Italian merchants
• maestri dabaco, libri dabaco
• Late 13th C
• 15 from the 14th C
• over 100 from the 15th

47
Abacus books
48
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

49
(No Transcript)
50
Margarita Philosophica
51
De Scripturis
52
Contents

• Inventory
• Memorandum
• Journal
• Ledger
• How to enter various transactions in the books
• Various other accounts
• Closing or balancing

53
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

54
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

55
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

56
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

57
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

58
Partnerships

• Record all details in the Memorandum
• partnerships 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

59
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

60
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

61
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

62
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

63
Dependencies on De Scripturis

• Domenico Manzoni Quaderno doppio (Venice, 1540)
• based to a large extent on Paciolis
• tidied up
• how to correct badly kept account books
• set of illustrative accounts

64
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)

65
Dependencies on De Scripturis

• Hugh Oldcastles A profitable treatyce (1543)
• borrows very closely from de Scripturis
• does not contain a model set of accounts
• Schweickers Zwifach Buchhalten (1549)
• derivative of Manzonis work and he
  
  
  
  
  
  
  
  nce
  indirectly on the de Scripturis

66
Later treatises on accounting

• Increased in number
• Showed increasing variety in subject matter and
  treatment
• Paciolis name continued to be remembered
• 19th century the father of double entry
  bookkeeping
• Pacioli 2000 late 1990s software

67
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

68
Questions?