Accountants have realised for a long time that negatives are very unsatisfactory so they invented the double entry system. This is all backed up by the simple equation that
Assets = Liabilities + Capital
Assets are debit accounts as debits are used to increase the amount of Assets and credits to decrease them. Liabilities and Capital are on the other side of the equation and are credit accounts as they use credits to increase these accounts and debits to reduce them.
This use of debits and credits reflects their struggle with negative numbers. Liabilities and Capital represent monies owed to other people and Assets represent moneys the company owns. Accountants have recognised that monies owed to other people are still positive in their own way. However, they are different to the positive numbers a company owns.
Fra Luca Bartolomeo de Pacioli (c. 1447 – 1517) is known as “The Father of Accounting and Bookkeeping” as it was he who first wrote about double entry bookkeeping. He was born in Borgo in Tuscany but spent time in Venice where he published a work describing the Venetian use of the double entry system.
I am learning Italian and while speaking with an Italian tennis player, I completely forgot the word for before. Now this is one of the basic words you need in Italian. I remembered afterwards of course that the ‘prima di’ was used for before. Interestingly, ‘la prima’ and ‘il primo’ are the words for first. So, the Italians intuitively considered that there was nothing before the first and used first to represent before. It seems that they did not even consider 0 before 1, let alone consider negative numbers. It is not surprising that they invented double entry accounting without using negative numbers.
