Double-Entry Accounting: The Mathematical Formulation and Generalization

10 Pages Posted: 11 Feb 2009

Date Written: December 5, 2007

Abstract

Although double-entry accounting has been used in the business world for 5 centuries, the mathematical formulation of the double entry method is almost completely unknown. In this paper, the usual case of scalars is given first and then generalized to the multi-dimensional case of vectors. The success in maintaining the two-sided accounts, debits and credits, the double-entry principle, and the trial balance in both cases provides strong evidence that the formulation correctly captures the double-entry method in mathematical form.

Keywords: double-entry accounting, debits, credits, multi-dimensional accounting

JEL Classification: M4

Suggested Citation

Ellerman, David, Double-Entry Accounting: The Mathematical Formulation and Generalization (December 5, 2007). Available at SSRN: https://ssrn.com/abstract=1340619 or http://dx.doi.org/10.2139/ssrn.1340619

David Ellerman (Contact Author)

University of Ljubljana ( email )

School of Social Science
Ljubljana, CA
Slovenia

HOME PAGE: http://www.ellerman.org

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