The Renaissance

The Vatican, and the Italian banking centers of Genoa, Florence and Venice grew wealthy in the
14th century.  Their operations recorded transactions, made loans, issued receipts and other
modern banking activities.  Fibbonaci’s Liber Abbas was widely read in Italy, and the Italian Giovanni
di Bicci de’ Medici introduced double-entry bookkeeping for the Medici bank in the 14th century. By
the end of the 15th century, merchant ventures in Venice used this system widely. The Vatican was
an early customer for German printing technology, which they used to churn out indulgences.
Printing reached a wider audience with widely available reading glasses from Venetian glassmakers
(medieval Europeans tended to be far-sighted, which made reading difficult before spectacles).  Italy
became a center for European printing, particularly with the rise of Aldine Press editions of classics
in Greek and Latin.[27]  
It was in this environment that a close friend of Leonardo da Vinci, the itinerant tutor, Luca Pacioli
published a book not in Greek or Latin, but in a language that merchants understood well -- Italian
vernacular.  Pacioli received an abbaco education, i.e., education in the vernacular rather than Latin
and focused on the knowledge required of merchants. His pragmatic orientation, widespread
promotion by his friend da Vinci, and use of vernacular Italian assured that his 1494 publication,
Summa de Arithmetica, Geometria, Proportioni et Proportionalita (Everything About Arithmetic,
Geometry and Proportion) would become wildly popular.  Pacioli's book explained the Hindu-Arabic
numerals, new developments in mathematics, and the system of double-entry was popular with the
increasingly influential merchant class.  In contrast to scholarly abstracts in Latin, Pacioli's
vernacular text was accessible to the common man, and addressed the needs of businessmen and
merchants.[28]  His book remained in print for nearly 400 years.
Luca’s book popularized the words “credre” means “to entrust” and “debere” means “to owe”-- the
origin of the use of the words "debit" and "credit" in accounting, but goes back to the days of single-
entry bookkeeping, which had as its chief objective keeping track of amounts owed by customers
(debtors) and amounts owed to creditors. Debit in Latin means "he owes" and credit in Latin means
"he trusts".[29]
Ragusan economist Benedetto Cotrugli's 1458[citation needed] treatise Della mercatura e del mercante
perfetto contained the earliest known[citation needed] manuscript of a double-entry bookkeeping system. His
manuscript was first published in 1573. [30]
Luca Pacioli's Summa de Arithmetica, Geometria, Proportioni et Proportionalità (early Italian:
"Review of Arithmetic, Geometry, Ratio and Proportion") was first printed and published in Venice in
1494. It included a 27-page treatise on bookkeeping, "Particularis de Computis et Scripturis" (Latin:
"Details of Calculation and Recording"). Pacioli wrote primarily for, and sold mainly to, merchants
who used the book as a reference text, as a source of pleasure from the mathematical puzzles it
contained, and to aid the education of their sons. His work represents the first known printed treatise
on bookkeeping; and it is widely believed to be the forerunner of modern bookkeeping practice.
In Summa de arithmetica, Pacioli introduced symbols for plus and minus for the first time in a printed
book, symbols which became standard notation in Italian Renaissance mathematics. Summa de
arithmetica was also the first known book printed in Italy to contain algebra.[31]
Ragusan economist Benedetto Cotrugli's 1458[citation needed] treatise Della mercatura e del mercante
perfetto contained the earliest known[citation needed] manuscript of a double-entry bookkeeping system,
however Cotrugli's manuscript was not officially published until 1573. In fact even at the time of
writing his work in 1494 Pacioli was aware of Cotrugli's efforts and credited Cortrugli with the
origination of the double entry book keeping system. [32][33]
Although Luca Pacioli did not invent double-entry bookkeeping, [34] his 27-page treatise on
bookkeeping is an important work because of its wide circulation and the fact that it was printed in
the vernacular Italian language.[35]
Pacioli saw accounting as an ad-hoc ordering system devised by the merchant. Its regular use
provides the merchant with continued information about his business, and allows him to evaluate
how things are going and to act accordingly. Pacioli recommends the Venetian method of double-
entry bookkeeping above all others. Three major books of account are at the direct basis of this
system:

1. the memoriale (Italian: memorandum)
2. the giornale (Journal)
3. the quaderno (ledger)
The ledger classes as the central document and is accompanied by an alphabetical index.[36]
Pacioli's treatise gave instructions on recording barter transactions and transactions in a variety of
currencies – both of which were far more common than today. It also enabled merchants to audit
their own books and to ensure that the entries in the accounting records made by their bookkeepers
complied with the method he described. Without such a system, all merchants who did not maintain
their own records were at greater risk of theft by their employees and agents: it is not by accident
that the first and last items described in his treatise concern maintenance of an accurate inventory.[37]