Reviewed by Richard H. Homburger
Wichita State University
This reprint of a text published originally in New York in 1938 by American Institute Publishing Company is very welcome, indeed; it should please educators and accounting practitioners alike. From a purely aesthetic point of view, it is remarkable how well the appearance and make-up of the original text has been preserved in the reprint. This refers to the Italian Old Style print, elaborate capital letters at the beginning and artistic designs at the end of each chapter, color schemes, and last, not least, the high quality of the paper itself. Aside from the text’s distinctive outward appearance, Peragallo’s work has continued to retain its unique place in the ever-increasing literature on accounting history. This is due to its concise style, clearly defined and limited scope of coverage, and its excellent selection of significant samples among the early Italian accounting records.
Peragallo’s work is divided into three parts. The first, comprising 50 pages, is largely an exposition of the early development of double entry bookkeeping, giving a rich selection of forms used in the three distinct centers of early mercantile practice, Genoa, Florence and Venice. The second part, 74 pages in length, describes the evolution of Italian literature on double entry bookkeeping from its beginning to the time of Luca Paciolo to the early part of the twentieth century. A rather short third part summarizes the functional develop-ment of double entry as it relates to the changing forms of the ledger, the journal and financial statements, each being treated in-dividually.
The first part of the text is the most interesting and challenging of the three. Samples of early records are carefully selected. They are presented in their original Latin version as well as in English translation. Interrelated debit and credit entries in different accounts are presented in full. Due to the absence of a journal in the earliest records, this is particularly important to give the modern reader a fuller understanding of the entire recording procedure.
Genoa is represented by excerpts from the accounts of the Massari, the city treasurers, dating from 1340 A.D. The famous pepper account, presented in full, gives a beautiful illustration of a “mixed” merchandise account in which debits are included for cost of goods and all incidental costs and credits for the sales proceeds. The closing of the resulting loss is shown in full in the account itself and, by contra entry, in the profit and loss account.
Early Florentine accounting is illustrated by excerpts from the Peruzzi ledger (1331-1335) and by selected entries from the Datini records. The Peruzzi accounts demonstrate early partnership accounting in the case of a family partnership, the procedure followed in transferring partnership interests and the closing of the capital accounts. The Datini excerpts presented are sparse but allow the modern reader to compare the advantages of the later bookkeeping forms used by the Datini over the more primitive forms they had used in earlier years. If his interest has been aroused by the samples presented in Peragallo’s text, he may wish to consult additional sources on the subject. Extant Datini records, housed for the most part in a special collection at Prado near Florence, run from 1366 to 1410 and show the most significant developments in double entry bookkeeping.
Samples of early 15th century Venetian accounting comprise some early government records, portions of the Soranzo Brothers’ ledger and of Andrea Barbarigo’s records. The Soranzo ledger illustrates the transfer of accounts from an old to a new ledger by means of a balancing account. Barbarigo’s records represent an example of the first use of an integrated journal and ledger system. A chapter on early Florentine industrial accounting, presenting very simple manufacturing records from the 14th century, rounds out the first part of the book. These records tend to indicate that much information can be lost if modern costing methods are not used.
Teachers of accounting may wish to make use of the selection of samples presented in the text to challenge their students’ imagination and criticism; the practitioner will find the illustrations helpful in gaining a critical perspective of modern methods.
The exposition of the development of Italian accounting literature, given in Part II, is concise, complete and easily understood: It is the only presentation of its kind currently available in the English language. Of most interest to the modern reader should be the description of 19th century theory of accounts. The approach and purpose differs greatly from our modern thinking in that the earlier theory appears to place form before substance and, in doing so, to defeat its own purpose. To the reader of foreign languages, similar and, perhaps, more extensive material is available in the works of Federigo Melis, Joseph-H. Vlaemminck and other European writers.
Edward Peragallo’s book is and will remain one of the classic works on early double entry bookkeeping. Its reprint edition should receive a most cordial reception by accounting historians.
(Vol. 2, No. 4, p. 3, 1975)
