Double-Entry Accounting: The Mathematical Formulation and Generalization
10 Pages Posted: 11 Feb 2009
Date Written: December 5, 2007
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: Suggested Citation