TITLE:
Enhancement of the Scientific Nature of Accounting: Past and Future Are Time Illusions, the Present Is the Power of Accounting
AUTHORS:
Essam Al Arbed
KEYWORDS:
Scientific Nature of Accounting, Accounting Equation, Double-Entry Bookkeeping, Triple-Entry Bookkeeping, Historical Cost Accounting, Time in Accounting, Past, Present, Future in Accounting, Accounting and Physics, Accounting Philosophy
JOURNAL NAME:
American Journal of Operations Research,
Vol.15 No.3,
May
9,
2025
ABSTRACT: By reviewing the critical evolution of accounting, especially accounting equations and double-entry bookkeeping, the researcher finds that double-entry bookkeeping has been praised by many notable authors in history. What advantage do they derive from the system of double-entry bookkeeping? It is among the finest inventions of the human mind. The principle of bookkeeping by double-entry is described as absolutely perfect, and it bears the same spirit as the system of Galileo and Newton. This research provides some thoughts and equations regarding accounting equations and double-entry bookkeeping, which enhance the scientific nature of accounting. The emergence of double-entry bookkeeping stems from the need to account for business transactions instead of predicting them. The evolution of double-entry bookkeeping increased the ability of potential accountants and others interested in the accounting discipline to make their judgments on a broader and more informed basis. It enabled them to establish a relationship between past accounting practices and present practices, and what practices ought to be. Critics of double-entry bookkeeping, including many accounting academics, claim that this system is not an absolute system that defies any extensions but rather is logically extendible to triple-entry bookkeeping by including a set of accounts called “force” in its third axis. Since the world has changed significantly, does the double-entry bookkeeping system still bear relevance today? Researchers believe that it is still quite useful in today’s business environment. Pacioli’s explanation of the form of a double-entry bookkeeping system is approximate to the form of its final development today. The theory underlying Pacioli’s work is even more contemporary. Though his purpose was practical, double-entry bookkeeping was invented according to the laws of physics, indicating that the past and future are just thoughts happening in the present. Therefore, it is initially accepted that it is impossible to experience anything other than the present moment. According to the findings of this research, historical cost and constant purchasing power are sound principles in accounting. They suit any time and place, and every treatment in accounting is true and accurate as long as it is based on the double-entry and accounting equation found in mathematics; moreover, the concept of time in accounting is only forward. It is wrong to go back to the past to revalue assets within the conditions of the present time, as past and present are equal. Double-entry bookkeeping is an honest system regardless of market forces and inflation. Besides, we cannot account for the time dimension as long as the laws of Physics argue that the past, present, and future occur at the same time.