Colin dodds debit credit theory software#
Colin dodds debit credit theory series#

In fact, look at most dictionaries and you will discover over 10 different meanings for the term credit apart from the one we use in accounting. Other confusions that cloud the understanding of “Debits and Credits” for most accounting students, is the fact that English as an evolving language has developed many different meanings for the terms “Debits and Credits” other than the ones originally coined by Luca in 1494. It is also clear that we got the Debit abbreviation of “Dr.” from the Latin, because unlike the Latin term, there is no ‘r’ in the English term Debit.

Colin dodds debit credit theory series#

These principles will be explained in greater detail later in the series of articles on this topic. These Latin meanings give us our first glimpse into the underlying principles that the “Debit and Credit” classification system seeks to maintain. In Latin the word “Credre” means “to entrust” and “Debere” means “to owe”. So the terms he used for Debit and Credit in his book were “Credre” and “Debere”. Luca’s book was written in the vernacular of the age – Latin. Still, let’s not get any more confused other than point out that a lot has changed in the world in past 500 years, but the double-entry bookkeeping system is not one of them.

Colin dodds debit credit theory software#

This may further explain why he used “Debits and Credits” rather than + and – which is the system that the accounting software of today uses to process financial transactions. It is interesting to note that the concept of negative numbers was not generally accepted in mathematics in the 1500s when Luca first codified the double-entry bookkeeping system. Now while this system was developed over 500 years ago, its principles and processes are still followed by today’s accountants and bookkeepers the world over. The overall system that he documented has come to be known as the “Double- entry bookkeeping” system. Luca’s book explained the whole bookkeeping system of which Debits and Credits were a key part. Today Luca is revered widely as ‘The father of accounting’. The book Luca wrote to codify the Venetian method of bookkeeping in 1494 was one of the first published by Gutenberg on his innovative printing press. While it was widely used by the Venetian merchants, its took a mathematician by the name of Luca Pacioli to document and publish this system in a book. ‘Debits and credits’ is a financial transaction classification system that was first used by the Venetian merchants in Italy in the 15th century. Basic Accounting Concepts 2 – Debits and Credits.Basic Accounting Concepts 1 – Define Accounting.Everything you need to know about basic accounting concepts