Ian Paterson, AASA, ACIS, AAIM, grand-daddy of all accountants,
used to say, "If the debits don't equal the credits - make 'em!"
The accountant of a large business had the same daily routine: on arriving at work, he would unlock the bottom drawer of his desk, peer at something inside, then close and lock the drawer. He had been doing this for thirty years.
The entire staff was intrigued but no-one was game to ask him what was in the drawer. Finally the time came for him to retire. There was a farewell party with speeches and a presentation. As soon as he had left the building, some of the staff rushed into his office, unlocked the bottom drawer and peered inside. Taped to the bottom of the drawer was a sheet of paper. It read, "Debit on the left, credit on the right".
This joke isn't funny with Arabs - well, nothing is - whose debits and credits are vice versa.
I wonder if this joke made the rounds of accountants who in 1994 had gathered in the small Italian town of San Sepulcro to celebrate the publication five hundred years earlier of the first book on double-entry accounting by the Italian monk Luca Pacioli (pronounced pot-CHEE-oh-lee), who was born there circa 1445.
While Pacioli is often called the "Father of Accounting", he did not invent the system. Instead, he simply described a method used by merchants in Venice during the Italian Renaissance period. His system included most of the accounting routines as we know them today. For example, he described the use journals and ledgers, and he warned that "a person should not go to sleep at night until the debits equalled the credits!" His ledger included assets (including receivables and inventories), liabilities, capital, income, and expense accounts. He demonstrated year-end closing entries and proposed that a trial balance be used to prove a balanced ledger. Also, his treatise alludes to a wide range of topics from accounting ethics to cost accounting -- see translation by J.B. Geijsbeek, Ancient Double-Entry Bookkeeping).
Practising Pacioli's teachings afforded me a comfortable living, and although my personal life was not always perfectly balanced, I never went to sleep at night until all the debits had equalled the credits (or, to get an early night, by posting the difference to a suspense account, as my friend Ganesh Sharma Krishna in Singapore shrewdly observed).
