Reviewed by Raymond T. Holmes, Jr. Virginia Commonwealth University

Although today’s accountant may feel somewhat overwhelmed by the volume of new pronouncements and regulations from the FASB, the AICPA, the SEC and other policy setting bodies, in fact business practices and accounting for business activities change very slowly. There have been few radical advances in procedures, and the double-entry system continues to govern accounting concepts. Recognition of the slowly evolving nature of accounting is confirmed by Frederic William Cronhelm’s Double Entry by Single; however, somewhat in contradiction to the above statement, the accumulation of small changes over an extended period of time results in the 1985 product being barely recognizable as embody-ing the same basic concepts that controlled 1818 record-keeping.

It may be appropriate to compare the evolution of accounting methods to a 3 per cent inflation rate, with similar effect. The rate of change may seem modest or slow, but just as compounding $1 at 3 per cent for 166 years will produce a total of $135.20, the accumulation of changes in accounting methods produces a vastly different product in 1985 than existed in the early industrial era.

Cronhelm’s book was published to promote a bookkeeping system devised by the author to shorten the “Italian method,” in common use at that time. In justifying his own method the author describes very briefly then prevailing procedures. The book was obviously written for the accountant of 1818, and the author assumes the reader is familiar with the system in wide-spread use at that time. His explanations, therefore, are not sufficient to make clear to a modern reader just how a set of records of that date was constructed. Sample sets of records for retailers, wholesalers, manufacturers, merchants and bankers help rectify this problem. It is possible to decipher record-keeping procedures and the interrelationships among various account books by tracing the process-ing of transactions in these records.

The book attracted notice at the time it was published, but seems to have had little influence on later accounting theoreticians and writers. The failure to make a lasting impact may be traced to the novelty of its approach, or it may have been due to a misfortune that befell the publication. The publisher’s building was destroyed by fire and nearly the entire edition of Cronhelm’s work was lost. It was not reprinted.

Cronhelm was an accounting practitioner and a man of strong opinions. He believed that good records were essential to the survival of a business and expressed this view in an intriguing manner, as follows:

“In the commercial world, few things are more readily ad-mitted, or more generally experienced than the importance of bookkeeping. The ruin that rarely fails to punish its neglect renders it indispensable to the individual . . . .” (Preface v)

He was convinced that the system of record-keeping must be efficient and produce the desired results with the greatest degree of conciseness. It was in this area that he directed his efforts as a practicing accountant, and as a writer he described the method he had found useful in his daily work.

Unlike some of his contemporaries, who were exploring new approaches, Cronhelm was totally wedded to the double entry system. He maintained that there were no substitutes for the proofs afforded by this concept. He was further convinced that his “New Method” constituted a major advance in efficiency. In fact, his enthusiasm for his system resembles the sales pitch of the proverbial “snake-oil salesman,” with the claim that:

“The New Method excludes what is defective, and combines what is advantageous, in each of the others. It obtains by two entries the same results as the Italian System by four: it possesses the brevity of Single Entry without its imperfections, and the proof of Double Entry without its repetitions.” (Preface vi)

Cronhelm’s New Method did not achieve the quantum leap forward he envisioned but his basic premises were sound and he may be judged to have contributed to evolving accounting knowledge and methods.