This reasoning will perhaps be better understood if the profit earned is brought out by means of a Capital Account. The Capital Account would appear as follows:

Capital Account.

0 0 100 0 0

Balance.

£1460

Cash
Profit.

310 0 0*

The figure marked with an asterisk is the figure required, and, by inserting the other figures which are all known, the profit or the loss can be obtained. The capital at the beginning-£1460, is placed on the credit side, together with the cash put into the business. On the debit side are placed the drawings-£360, and the balance of capital at the end—£1510, which is got from the State of Affairs. To make the account balance £310 must be credited, and as the profit always goes to the credit of the Capital Account when transferred from the Profit and Loss Account, it is at once seen that the £310 represents profit.

This method of arriving at the profit or loss is always the most direct, and the result is forced out, as it were, by using the figures which are known. In connection with partnership questions where the books are incomplete, this method may be seen to advantage, as in the following example:

A and B are in partnership on equal terms, and their position at 1st January was as follows:

There is a stipulation in their deed of copartnery to the effect that interest at 5 per cent is to be allowed on partners' capital, and that A has to be credited with a salary of £200 before the profits are divided. During the year A has drawn out cash from the business at various times, amounting to £200, while B has put cash into the business amounting to £1000. At 31st December interest is allowed and charged on B's Capital Account, and results in A being entitled to be credited with £93 and B with £75 in respect of interest. Their position at 31st December was as follows::

STATE OF AFFAIRS as at 31st December.

From the above state of affairs it will be observed that the joint capital amounts to £4370, but it is quite evident that this figure cannot be allocated between A and B till the profit is ascertained. Using the "capital account" method, and opening a joint capital account for A and B, we find the profit to be £202, as follows:

From the above joint capital account it will be observed that the profit for the year has been £202, and, having ascertained this, the shares of A and B in the capital of £4370 may be found by preparing capital accounts for each partner as follows:

It is now ascertained how the capital of £4370 is held:

In all questions of partnership, where the books are not complete, the profit must first be ascertained by means of a joint capital account, and separate

capital accounts of the partners are then prepared, and the capital, as shown by the state of affairs, is thus allocated between the partners.

Many other questions may arise in incomplete book-keeping; but if the method of preparing the capital account is known, no difficulty will be experienced in arriving at the profit or loss, which is the first thing necessary to be found out. Having ascertained the profit, partnership questions may be worked out so as to allocate the capital held by the partners, as shown above.

The great advantage of book-keeping by double entry over that of single entry is that, by the former, detailed profit and loss accounts may be prepared each year and compared with previous years, and the source of the increase or decrease in the profit of any year thus ascertained, while by the latter system this cannot be done. The causes leading up to an increase in the profit of one year compared with another are unascertainable so far as books kept by single entry are concerned.

Books kept on the single entry system are not capable of being brought to a balance at any time, while by double entry this is always possible.

With books kept on the single entry system fraud can easily be committed, which would be impossible by double entry. For example, let it be assumed that a person keeps a cash book and a personal ledger, but does not keep his books by double entry. When a customer who is due £12 pays his account, the cashier could enter £10 as received and pocket £2, while in the ledger he marks off the £12 as having been paid. Such a fraud could not be discovered unless all the transactions were checked

Book-keeping: History. Wherever trade was carried on and credit had been introduced, some elementary form of book-keeping-whether the notched stick, the chalk-marked door-back, or the Babylonian tablet-was necessary. In following the history of trade we trace the history of book-keeping.

For the origin of book-keeping we must therefore go back to the origin of trade and credit, but for the birth of the modern science we have only to go back to the time when the development of commerce rendered necessary-and the introduction of Arabic figures made possible-a more complete system. Italy was one of the first among European nations to adopt the Arabic system of numeration. Venice, in the fifteenth century, was in the zenith of its prosperity, and was the focus of European commerce. Accordingly it was in Venice and in the fourteenth or fifteenth century that book-keeping by double entry originated. Who invented it cannot be told. It must first have been used in a limited fashionthe treatises which exist showing that it was more than one hundred years before its full use was realised; but the root idea, the twofold aspect of every transaction, must have been hit upon by some forgotten genius. The oldest writers presume the pre-existence of it. Pacioli, whose book was published not long after the invention of printing, says: "We shall follow the method of Venice, which, without doubt, is much to be preferred before all others." Benedetto Cotrugli, whose treatise was written in 1458, though not printed till 1573, describes a system of double entry, but does not claim originality for it.

With the decay of Venetian commerce and the rise of that of the Netherlands, we find the centre of activity in the development of book-keeping moving by way of Nüremberg to Antwerp and Amsterdam, whence, still following the course of trade, it crossed over in the beginning of the seventeenth century to Great Britain. The earlier British writers acknowledge their indebtedness to the Dutch. Dafforne, one of the ablest of them, whose book is a remarkably acute and complete exposition of double entry, received his training in Amsterdam.

In Great Britain the science has advanced as commerce has flourished. It took time for the accurate and finished journalising method of the early theorists to permeate business circles, and again it took time before that elaborate system gave way to the more direct and practical methods of the present day. During the last half-century an immense amount of ingenuity has been applied to the perfection of systems of book-keeping, and the many skilful adaptations of the principle of double entry to special circumstances which have recently been made

form, with the history of their evolution, a wonderful testimony to the value of the discovery of that nameless old Venetian book-keeper. RICHARD BROWN.

Book-keeping: Literature. The following is a list, with notes, of printed books on book-keeping. It is as full-to the end of the seventeenth century—as the writer can make it, containing every book in the European languages of which he can find a trace. No one can claim completeness for a bibliography of ancient authors, but there is no published list known to the writer which contains even half the number of the books here mentioned. From the beginning of the eighteenth century only English books are included in the list, and, especially as regards publications of recent date, only a few of the more important.

Venice, 1494. LUCAS PACIOLI. "Frater Lucas de burgo Sancti Sepulcri." "Suma de Arithmetica Geometria Proportioni e Proportionalita."

Another edition. Tusculano, 1523.

Another book entitled "La Scuola perfetta dei mercanti di Fra Pacciolo di Borgo, Santo Sepulcro." Venice, 1504.

"Behend vnd

The earliest known printed book on book-keeping. The author follows the "method of Venice," and the system described is what we call double entry. Nürnberg, 1521. HEINRICH SCHREIBER. 66 'Henrichen Gramateum. Kunstlich Rechnung nach der Regel vnd welhisch practic," etc. Erfurt, 1523 (written and completed at Vienna in 1518). "Rechenbüchlin, Künstlich, behend vnd gewiss, auff alle Kauffmannschafft gericht." Other editions: 1545, and Frankfurt, 1572.

The oldest German treatise on the subject.
corresponding to single entry.

Venice, 1525. GIOVANNI ANTONIO TAGLIENTE.

"Henricus Grammateus."

Describes a kind of book-keeping closely

"Considerando io Joanni Antonio Taiente

el laudabile modo de tenere conto de libro dopio cioe, el Zornale," etc.

This small book illustrates the use of Dr. and Cr. by examples, but gives no form of a ledger.

Nuremberg, 1531. JOANN GOTLIEB. "Ein Teutsch verstendig Buchhalten für Herren oder Gesellschaffter inhalt Wellischem process," etc.

Another edition. Nürnberg, 1546.

Describes the rudiments of Italian book-keeping, but not very clearly. Venice, 1534. DOMINICO MANZONI.

di Venetia."

Another edition. Venice, 1554.

66

Quaderno doppio col suo giornale secondo il costume

Other editions bearing the title "Libro mercantile ordinato col suo giornale et alfabeto per tener conti doppi al modo di Venetia." Venice, 1540, 1564, 1565, 1573, and 1574.

A close copy of Pacioli, with simply the addition of examples.

Milan, 1539. GIROLAMO CARDANO. "Practica Arithmetice et mensurandi Singularis." Reprinted in the author's collected works. Leyden, 1663.

Chapter LX., headed "De ratione librorum tractandorum," deals briefly with bookkeeping.

London, 1543. HUGH OLDCASTLE, Scholemaster. "A profitable Treatyce called the Instrument or Boke to learne to knowe the good order of the Kepyng of the famouse reconynge, called in Latyn, Dare and Habere, and in Englyshe, Debitor and Creditor."

Reprinted by John Mellis in 1588, vide infra. Believed to be the first English book on book-keeping, but no existing copy of this edition is now known. Antwerp, 1543. JAN YMPYN CHRISTOFFELS. 66 'Nieuwe Instructie Ende bewijs der lo-offelijcker Consten des Rekenboecks ende Rekeninge te houdene nae die Italiaensche maniere," etc.

A French translation published in Antwerp, 1543, entitled "Nouuelle Instruction et Remonstration de la tres excellente feiece du liure de Compte, pour compter & mener comptez, a la maniere d'Itallie," etc.

An English translation published in London, 1547, entitled "A notable and very excellente woorke, expressyng and declaryng the manner and forme how to kepe a boke of accomptes or reconynges, verie expedient and necessary to all Marchantes, Receiuers, Auditors, Notaries, and all others. Translated with greate diligence out of the Italian toung into Dutche, and out of Dutche into Frenche, and now out of Frenche into Englishe." The earliest known Dutch and French works on book-keeping. Part I. is practically

an adaptation of Pacioli. Part II. contains excellent examples of Journal, Ledger, Inventories, etc.

Nürnberg, 1549. WOLFFGANG SCHWEICKER, Senior. "Zwifach Buchhalten, sammt seine Giornal desselben Beschlus auch Rechnung zuthun," etc.

An excellent book, drawn largely from Pacioli and Manzoni.

Antwerp, 1550. VALENTIN MENNHER De Kempten. "Practique brifue pour cyfrer et tenir Liures de Compte touchant le Principal train de marchandise.'

A Spanish translation by ANTICH ROCHA, published at Barcelona in 1565, entitled "Compendis y breue instruction por tener Libros de Cuenta, Deudas, y de Mercaduria." Another edition (in French) published at Lyon, 1591.

Another book by Mennher, published at Antwerp in 1565, entitled "Practique pour brievement apprendre à Ciffrer, & tenir Liure de Comptes, auec la Regle de Coss, & Geometrie." Mennher added various improvements in details to the system of double entry.

Londor 1553. JAMES PEELE.

"The maner and fourme how to kepe a perfecte reconyng after the order of the most worthie and notable accompte of Debitour and Creditour set forthe in certain tables with a declaracion thereunto belongyng."

Another work by Peele was published in London in 1569, entitled "The patheway to perfectness in the accomptes of Debitour and Creditour: in manner of a dialogue very pleasant and proffitable for Marchaunts and all other that minde to frequent the same, once againe set forthe and very much enlarged," etc.

In both books a system of double entry is described such as Peele believed to be used in Venice. In the earlier publication the "great booke of accomptes" is called "Quaterne" (from the Italian "Quaderno "), in the later "Leager."

Venice (?) 1558. ALVISE CASANOVA. 'Specchio lucidissimo."

Said to be simply a copy of Pacioli and Manzoni. Venice, 1573. BENEDETTO COTRUGLI.

A French translation, dated 1582.

"Della mercatura e del mercante perfetto."

This book is stated to have been written and completed in 1458, though not printed till 1573. There is a description of mercantile book-keeping with brief rules which indicate familiarity with the system of double entry.

Antwerp (?) 1573. MICHIEL COIGNET. A Dutch work on book-keeping.

Mantua, 1586. ANGELO PIETRA. "Indrizzo de gli Economi o sia ordinatissima instruttione da regolatamente formare qualunque scrittura in un libro doppio."

Treats of the accounts of monasteries.

London, 1588. JOHN MELLIS. "A briefe instruction and maner how to keepe bookes of Accomptes after the order of Debitor and Creditor, and as well for proper Accompts pustible, etc. By the three books named the Memoriall Journall and Leager, and of other necessaries appertaining to a good and diligent marchant. The which of all other reckoninges is most lawdable for this treatise well and sufficiently knowen, all other wayes and maners may be the easier and sooner discerned learned and knowen. Newely augmented and set forth by John Mellis, Scholemaister."

The author acknowledges that he is but the "reneuer and reviver of an auncient old copie" of Oldcastle referred to above. The original portion of the work consists of some forms of books and a treatise on arithmetic. The system of book-keeping described is "after the forme of Venice.".

Amsterdam, 1588. NICOLAUS PETRI DAVENTRIENSIS. Also 1595 and 1596. The last entitled " Practicque omte Leeren Rekenen Cypheren ende Boeckhouwen met die Reghel Coss," etc.

Contains arithmetic, algebra, geometry, and an example of book-keeping. Rotterdam (?) 1590. ELEIUS EDUARD LEON Mellema. A Dutch writer.

Madrid, 1590. B. S. DE SOLORZANA. "Libro de Caxa y manual de Cuentas de Mercaderes." "Compendio para tener y regir los libros de Cuentas de Mercaderes."

(?) 1592. BARTHELEMY DE RENTERGHEM. A Dutch writer.

Hamburg, 1594.

PASSHIER-GOESSENS. A good German writer.

(?) 1595. MARTINUS WENCESLAUS. A Dutch writer.

London, 1596. W. P. "The Pathway to Knowledge. Conteyning certaine briefe Tables of English waights and measures. With the Rules of Cossicke, Surd, Binomicall, and Residuall Numbers, and the rule of Equation or of Algebere . . . and lastly the order of keeping of a Marchant's booke, after the Italian manner, by Debitor and Creditor. in Dutch, and translated into English by W. P."

(?) 1598. MARTIN VAN DEN DYCKE. A Dutch writer.

Middelburg, 1603. JAN COUTEREELS of Antwerp.

Leyden, 1605-7. SIMON STEVIN of Bruges. "Mathematica hypomnemata," etc.

Written

The second volume of this work treats of "Book-keeping for Princes (or States) after the Italian manner.'

(?) 1609. SIMONE GRISOGONO DI ZARA. "Mercante arrichito dal perfetto qua-
"Dell' universal trattato di libri doppi."

derniere.'
Venice, 1610. GIOVANNI ANTONIO MOSCHETTI,
Follows Tagliente, Manzoni, and Casanova.
Amsterdam, 1615. HENDRICK WANINGHEN VAN CAMPEN. "Tresoor vant Italiaens
Boeck-Houden."

L

Other editions by IOANNES BUINGHA, published in Amsterdam in 1627 and 1639.
Amsterdam, 1616. JAN WILLEMSZ von Löwen. "Goulden Schoole."

London, 1622. GERARD MALYNES, Merchant. "Consuetudo, vel, Lex Mercatoria, or, The Antient Law-Merchant. Divided into three parts: according to the essentiall parts of Trafficke, Necessarie for all Statesmen, Judges, Magistrates, Temporall and Civile Lawyers, Mintmen, Merchants, Mariners, and all others negotiating in all places of the world."

Has a chapter on the keeping of merchants' accounts by double entry.

London, 1632. I. CARPENTER, Gent. "A most excellent instruction for the . . . keeping merchants bookes of accounts by way of Debitor and Creditor. . . . And . . . here is adioyned the practice by an example of the Inventory, Journall, and Lidger," etc.

Largely taken from Hendrick Waninghen.

Bologna (?), 1632. MATTEO MAINARDI. 'Scrittura Mercantile."

London, 1636. RICHARD DAFFORNE of Northampton, Accountant. "The Merchants' Mirrour, or Directions for the perfect ordering and keeping of his accounts, Framed by way of