Journal of Service Science and Management, 2011, 4, 445-452
doi:10.4236/jssm.2011.44050 Published Online December 2011 (http://www.SciRP.org/journal/jssm)
445
Principal Factors Affecting IDBT Evolution
Changqing Liu1, Haili Yuan2
1Department of Accounting, Zhengzhou Institute of Aeronautical Industry Management, Zhengzhou, China; 2School of Mathematics
and Statistics, University of Wuhan, Wuhan, China.
Received October 9th, 2011; revised November 16th, 2011; accepted November 28th, 2011.
ABSTRACT
Studies on Italian Double-entry Bookkeeping Thought (IDBT) evolution are seldom found in such aspects as accounts
with persons (AP), accounts with goods (AG), and accounts equilibria (AE), etc., so we studied IDBT evolution in the
aspects stated above and the principal factors for IDBT evolution, including their selection, contribution and sequence
in this thesis. By our analysis, IDBT evolved in such aspects as accounts with persons (AP), accounts with goods (AG),
loss and net income accounts (LNIA), capital accounts (AC) and accounts equilibria (AE), etc., and ripened in the pe-
riod of 1430-1482. Principal factors affecting IDBT evolution can be ordered by contribution as follows: social condi-
tions (SCS3) and relationships between supply and demand of accounting thought (RBSDAT2). And our related advice
is as follows: governments should adopt appropriate policy, and help to build proper social conditions and strengthen
the relationships between supply and demand of accounting thought to promote the evolution of accounting thought.
Especially as to social conditions, IDBT evolution is mainly owing to external causes from the outside of Italy. Once the
outside motive disappeared, IDBT would lose the strong power of evolution and slow down its pace. So governments
should place more emphases on building proper social conditions by encouraging internal powers from the inside of
Italy.
Keywords: IDBT Evolution, Principal Factors, Contribution, Sequence
1. Introduction
The world is composed of many different kinds of eco-
nomic transactions among people, which have promoted
and are promoting social and economic development
greatly. The economic transactions above cannot exist and
develop without such kinds of flow at least as substance
flow, information flow, money flow, etc., which can all
be represented by value flow in essence.
One of the important methods to record and reflect the
flowing movement of value (or value flow) is double-
entry bookkeeping (DB), in which the economic transact-
tions must be recorded in Receipt and Pay entries in two
related journals or ledgers (i.e. in two different directions)
simultaneously and the amount in two directions should
be equal, so it’s important to study the evolution of dou-
ble-entry bookkeeping and its thought. According to my
study, the evolution of double-entry bookkeeping and its
thought should be studied in such aspects as accounts
with persons (AP), accounts with goods (AG), and ac-
counts equilibria (AE), etc., which constitutes the main
points of double-entry bookkeeping, but studies on Ital-
ian Double-entry Bookkeeping Thought (IDBT) evolu-
tion are seldom found in this way. Therefore I have stu-
died Italian Double-entry Bookkeeping Thought (IDBT)
evolution in this way [1,2], and was invited to attend
Academic Annual Conference of Chinese Accounting So-
ciety and International Conferences Jointly-Sponsored by
ASC ＆ AAH from 2005 to 2010. Encouraged by this, I
managed to study the principal factors affecting IDBT
evolution in this study and try to give appropriate advice.
According to our purpose of study, we will study prin-
cipal factors affecting IDBT evolution, including their
selection, sequence and contribution, so the other part of
this thesis can be structured as follows: first, IDBT evo-
lution, secondly main causes of IDBT evolution, thirdly
variable design and correlations, fourthly regression and
selection of principal factors, fifthly principal factors’ con-
tribution and their sequence, and sixthly conclusion and
related advice.
2. IDBT Evolution and Its Main Causes
IDBT evolved in such aspects as accounts with persons
(AP), accounts with goods (AG), loss and net income ac-
counts (LNIA), capital accounts (AC) and accounts equi-
libria (AE), etc., and ripened in the period of 1430-1482.

Principal Factors Affecting IDBT Evolution
446
2.1. IDBT Evolution
2.1.1. D ou ble-Entry Charac te rization o f A P
AP thought presented double-entry characteristic in 1211
as presented in the Florentine Bank Ledger.
Banking played a leading role in IDBT evolution. Then
Florentine banks usually set up an account for each client
and named the account with the client’s name, so this
kind of accounts is called accounts with persons (AP).
Banking gave AP the characteristic of double-entry in
1211 as presented in the Florentine Bank Ledger.
According to the Floren tin e Bank Ledger now stored
in Bibliotheca Mediceo Laurenziana di Firenze, Floren-
tine banks then not only set up journals but also entry
books. Journals were often used as memorandums and
references by which to classify and enter items in appro-
priate accounts, etc. Entry books were similar to the le-
dgers used today and set up as AP [3], which were the
important account books of Florentine Banks. In entry
books, an account was set up for each client and named
with the client’s name, and the folios of the ledger were
divided into upper and lower sections on each page. The
upper section, called the debit side today, was use to re-
cord what he must give us, i.e., what the banks should get
from the clients. The lower section, called the credit side
today, was use to record what he shall have from us, i.e.,
what the banks must give the clients, or what the clients
should get from the banks. As to each transaction, the
banks chose to transfer the amount of transactions from
the credit side of the account of one client to the debit
side of the account of the other client, or from the debit
side of the account of one client to the credit side of the
account of the other client, to settle accounts between or
among clients. That is to say, transactions involved must
be recorded in debit and credit entries in two related ac-
counts simultaneously. In other words, one entry in debit,
another in credit, and the amount in two directions
should be equal.
So it’s the transference carried out by Florentine banks
between or among clients that made AP present dou-
ble-entry characteristic so that both the increases and de-
creases of debts (or credits) and the relationships bet-
ween debtors and creditors could be recorded and re-
flected more clearly. But the debit side and credit side of
an account were still placed in upper section and lower
section respectively so the relationships between them
were not reflected directly, and the thought of AG did not
present double-entry characteristic yet, etc.
2.1.2. D ou ble-Entry Charac te rization o f A G
AG thought presented double-entry characteristic in the
period of 1296-1305 as presented in the Florentine Rin-
erio and Baldo Fini’s Merchant Ledger.
According to this Merchant Ledger, Rinerio and Baldo
Fini set up such accounts as journals, ledgers and general
ledgers, which not only included AP but also AG. To
record and reflect the increases and decreases of goods
and other related items, AG were further classified into
such accounts as quilts and clothes, woolen, boots and
hats, and miscellaneous accounts, etc. Such accounts abo-
ve were recorded in the similar way as used in AP above,
i.e., in double-entry.
So it is Rinerio and Baldo Fini’s treating AG the simi-
lar way as AP that made AG present double-entry char-
acteristic, which helped to record and manage goods and
other related items effectively and efficiently, including
their costs and expenses. But the debit side and credit
side of an account were still placed in upper section and
lower section respectively so the relationships between
them were not reflected directly, the net income or net
loss of the operations could not be measured and re-
flected clearly, and the accounts, including AG, did not
get balanced automatically yet, etc.
2.1.3. Loss and Net Income Accounts (LNIA)
and Partial AE
Partial AE (i.e. not all accounts balanced) thought pre-
sented in Genoese Public Ledger in 1340 by setting up of
loss and net income accounts (LNIA).
To check if the entries of accounts were right, people
tried to balance the accounts. When AP were settled, no
matter either debts were paid or loans were returned, the
entries in AP opposite to their balance sides could make
AP balanced automatically, but AG were different, only
settling AG could not make AG balanced automatically.
So as a result of people’s pursuing solution, Partial AE
thought presented in Genoese Public Ledger in 1340 by
setting up of loss and net income accounts (LNIA).
According to this Public Ledger, Genoese city admini-
stration then set up such accounts as journals, ledgers and
general ledgers, and the general ledgers included such
accounts as: 1) AP including Financial officials, Tax-
collecting officials and attesters, etc.; 2) AG including
Peppers and Fabrics and Silks, etc.; and 3) loss and net
income accounts (LNIA); etc.. Especially, loss and net
income accounts (LNIA) could not only accept the credit
balances transferred from the accounts with goods (AG)
but also help to measure the net income or net loss of the
operations [4]. In this way, AG got balanced and Partial
AE was realized.
So it is setting up of loss and net income accounts that
made Partial AE realized by getting some of the accounts
balanced, including AP and AG. Meanwhile the debit
side and credit side of an account were placed in left sec-
tion and right section respectively so the relationships
between them were reflected more directly, but some of
the accounts, especially the loss and net income accounts

Principal Factors Affecting IDBT Evolution447
could not get balanced yet, etc..
2.1.4. Capital Accounts (AC) and Complete AE
Complete AE (i.e. all the temporary accounts balanced)
thought presented in Venitian Donaldo Soranzo’s Mer-
chant Ledger in the period of 1406-1434 by setting up of
capital accounts.
According to this Merchant Ledger, Venitian Donaldo
Soranzo set up a complete set of accounts, not only in-
cluding accounts with persons (AP), accounts with goods
(AG) and loss and net income accounts (LNIA) but also
capital accounts (AC), etc.
Next we will show how Venitian Donaldo Soranzo got
all the accounts balanced. The first step is to close all the
temporary accounts. At the end of every accounting pe-
riod, accountants first summarized debit and credit amo-
unts and calculated the balances of the ledger accounts,
then transferred these balances into loss and net income
accounts (LNIA) to calculate net income or net loss whi-
ch was further transferred into capital accounts (AC), so
capital accounts (AC) not only accepted the balances
transferred from the loss and net income accounts (LNIA)
but also got all the temporary accounts balanced auto-
matically.
The next step is to get all the accounts balanced by
preparing trial balance. Accountants first posted all the
balances of the accounts into the trial balance, summa-
rized debit amounts and credit amounts respectively, and
proved the equality of debits and credits in the trial bal-
ance. If the amount of debits equaled to that of credits, it
not only meant all the accounts got balanced but also all
the entries were right. Otherwise something must be wrong
with the entries, accountants must check them until the
errors were found and corrected to ensure the amount of
debits equaled to that of credits.
So it is setting up of capital accounts (AC) and trial
balance that made Complete AE realized by getting all of
the accounts balanced. Meanwhile all the accounts were
entered in double-entry, and especially the preparing of
trial balance made a preparation for Balance Sheet, but
IDBT was not mature yet with preparing of Balance
Sheet being immature as one of the examples, etc..
2.1.5. Relati vely Ripe IDBT
IDBT as a whole ripened in the period of 1430-1482 as
presented in Andrea Barbarigo’s Merchant Ledger.
As the commerce developed, IDBT kept on evolving
and ripened relatively in the period of 1430-1482 with a
relatively advanced version as presented in Andrea Bar-
barigo’s Merchant Ledger [5].
According to this Merchant Ledger, the main charac-
teristics of relatively ripe IDBT could be summarized as
follows:
1) Book system: Account books were organized as a
system of three primary books, i.e., journals, ledgers and
general ledgers, etc.. When a transaction occurred, it was
immediately recorded in the journal, and the entries in
journals were usually chronological and detailed reco-
rding of business transactions in order of date. After the
transactions were entered in journals, the debit changes
and credit changes in the individual accounts of journals
were entered into the debit side and credit side of ledgers
respectively. Then the entries of ledgers were summa-
rized and copied to general ledgers further. So journals,
ledgers and general ledgers, etc., formed into an inter-re-
lated system.
2) Account system: The accounts in the general ledger
and other books could be classified as accounts with
persons (AP), accounts with goods (AG), loss and net
income accounts (LNIA), capital accounts (AC) and ba-
lances account, etc., which were united as a system and
could meet the need of bookkeeping very well.
3) Recording method: The entries were recorded in the
accounts based on the double-entry bookkeeping. With
Per meaning debit side, A meaning credit side, and the a-
mount in the two sides being equal, the entries in 1430
accounts give us clear evidence of double-entry book-
keeping [4].
4) Complete AE: The balances of loss and net income
accounts (LNIA) in both 1430 and 1432 were posted into
loss and net income accounts (LNIA) in 1434, then the
balance of which was posted into capital accounts, and
finally the balances of which were posted into balances
account, so all the accounts were got balanced.
5) Balance Sheet and Income Statement: According to
Andrea Barbarigo’s Merchant Ledger in the period of
1456-1482, Balances account was prepared in 1482 and
the yearly profit was also calculated irregularly. To make
it clear, we can briefly analyze it as follows. The first is
that all the balances on the debit sides and credit sides of
accounts were reflected and totaled in the balances ac-
count, which was used to examine the accuracy of record
keeping. If the record keeping was correct, the total
amount in the two sides must be equal. So balances ac-
count could be treated as both trial balance and balance
sheet. The second is that the yearly profit was calculated
mainly by means of loss and net income accounts (LNIA),
which divided expenses (or cost) into more subsidiary
items, so that profit could be determined by the formula
of revenue subtracting expenses more easily.
2.2. Main Causes for IDBT Evolution
2.2.1. The First Phase
The first phase is before 1211 when AP thought presen-
ted double-entry characteristic, main causes are stated as
follows:
1) Economic level (EL): There are two factors we

Principal Factors Affecting IDBT Evolution
448
should consider. The first is that the medieval military
expeditions of recovering Jerusalem from the Muslims
by Europeans greatly promoted the development of com-
merce. From 1096 to 1291, this kind of armed forces had
invaded and plundered the countries to the east of the
Mediterranean for at least 8 times, which brought back
silks, spices and other goods to Europe (including Italy)
from the Oriental World, and encouraged European peo-
ple to produce appropriate goods to exchange for what
they need from the Oriental World. The second is the hub
position of Italy that joined most important parts of the
world as a whole, especially joined Europe (including
Italy) with the Oriental World together, which stimulated
not only the trade between Europe (including Italy) and
the Oriental World but also the development of Italian
economy.
2) Relationships between supply and demand of ac-
counting thought (RBSDAT): From the late part of the
12th century to the beginning of the 13th century in Italy,
as industry and commerce developed rapidly, more and
more capitals were needed, and more and more entrepre-
neurs became clients of banks, which were very deman-
ding for banking. To facilitate the procedures and take
fewer risks, the banks preferred to transfer the amount of
transactions from creditors (or debtors) to debtors (or cre-
ditors) as middlemen rather than record the amount of
transactions as agents of creditors (or debtors), which cau-
sed AP thought to present double-entry characteristic [3].
3) Social conditions (SCS): As commerce developed,
more and more cities came into existence from the period
of the 9th - 10th century on, and became the center of in-
dustry and commerce. It is because of the commercial
revolution in the period of the 12th - 13th century that tens
of cities, especially those in the northern Italy such as
Florence, etc. became the economy center of Italy and
even of Europe, which in turn promoted commerce and
AP thought to develop.
2.2.2. The Second Phase
The second phase is before the period of 1296-1305
when AG thought presented double-entry characteristic,
main causes are stated as follows:
1) Economic level (EL): From 1230, many banks, es-
pecially those in Florence of Italy, set up agency bran-
ches in western Europe to collect duties for the Roman
Pope and do business of great amount with the Monarchs
there frequently, and therefore from the late 13th century
on, the Florence Banking became the pillar of European
financial markets.
2) Relationships between supply and demand of ac-
counting thought (RBSDAT): As commerce developed
more and more rapidly, facing such great difficulties as
larger and larger amounts of transactions, more and more
varieties of goods, and higher and higher turnover ratios
of goods, etc., Florence merchants realized that only the
accounts with persons (AP) could not meet the demand
of reflecting not only the purchases and sales of goods
but also the increases and decreases of cost (or expenses)
of goods, and therefore AG thought presented itself on
the stage with double-entry characteristic.
2.2.3. The Third Phase
The third phase is before 1340 when Partial AE thought
presented itself by setting up of loss and net income ac-
counts (LNIA), main causes are stated as follows:
1) Economic level (EL): At that time, Genoa was one
of the important hubs promoting the trade between Eu-
rope (including Italy) and the Oriental World only next to
Venice.
2) Relationships between supply and demand of ac-
counting thought (RBSDAT): In the middle part of the
14th century when capitalism developed rapidly, profit-
making became a more and more important aim for mer-
chants, they were very eager to get purchases price as
low as possible and sales price as high as possible, so the
amount of credits was usually more than that of debits in
the accounts with goods (AG). That’s to say, the ac-
counts with goods (AG) could not get balanced automa-
tically and usually had credit balances. How to solve this
problem encouraged the merchants to set up a new kind
of accounts, loss and net income accounts (LNIA), to not
only accept the credit balances transferred from the ac-
counts with goods (AG) but also help to measure the net
income or net loss of the operations, and therefore setting
up of loss and net income accounts (LNIA) got Partial
AE realized by getting all the accounts with goods (AG)
balanced (but LNIA not balanced).
3) Social conditions (SCS): In the beginning of the 14th
century, the double-entry bookkeeping for Italian Bank-
ing was very good. In 1327, Genoese city administration
organized a campaign of reforming accounting system by
following banking practice [4].
2.2.4. The Fourth Phase
The fourth phase is before the period of 1406-1434 when
Complete AE thought presented itself by setting up of
capital accounts, main causes are stated as follows:
1) Economic level (EL): From the 12th - 15th century,
Venice dominated the world trade, especially that be-
tween Europe (including Italy) and the Oriental World,
which not only strengthened the hub position of Italy but
also kept on providing engines for Italian economy.
2) Relationships between supply and demand of ac-
counting thought (RBSDAT): As stated above, the loss
and net income accounts (LNIA) could not get balanced
automatically, which encouraged the merchants and in-
vestors to manage to find a new solution. As what they

Principal Factors Affecting IDBT Evolution449
observed and experienced, investors were usually risk-
taker. That’s to say, the net income could increase the
investors’ equity and the loss could decrease the inves-
tors’ equity, so another new kind of accounts, capital
accounts, were set up to accept the balances transferred
from the loss and net income accounts (LNIA). And
therefore Setting up of capital accounts not only got the
loss and net income accounts (LNIA) balanced auto-
matically but also Complete AE realized by getting all
the temporary accounts balanced.
2.2.5. The Fifth Phase
The fifth phase is before the period of 1430-1482 when
IDBT ripened, main causes are similar to those for the
fourth phase.
Based on the main causes above, we will select prin-
cipal factors affecting IDBT evolution, analyze their con-
tribution and order them according to their contribution.
3. Variable Design and Correlations
3.1. Variable Design and Data Source
1) Dependent Variable: IDBT evolution, Let IDBTE be
IDBT evolution.
2) Independent variables:
a) Economic level: Let EL1 be economic level.
b) Relationships between supply and demand of ac-
counting thought: Let RBSDAT2 be relationships be-
tween supply and demand of accounting thought.
c) Social conditions: Let SCS3 be social conditions.
3) Data Source and Variables’ Scores: To reflect the
progressiveness of IDBT evolution, we let IDBTE equal
to 1, 2, 3, 4 or 5 for appropriate phase. To reflect the in-
fluence of each cause, we let it equal to 1 if it’s in opera-
tion, otherwise we let it equal to 0.
3.2. Correlations between IDBTE and
Independent Variables
According to Table 1, IDBTE is not only negatively cor-
related with social conditions, but also positively with
economic level and relationships between supply and
demand of accounting thought.
4. Regression and Selection of
Principal Factors
4.1. Basic Regression Model
12
3
12
3
I
DBTEEL RBSDAT
SCS
 

 
  (1)
Note in the equation above, α is constant, βj are re-
gression coefficients and ε is residual term for the model
of IDBT evolution.
4.2. Result of Regression for IDBT Evolution
Model
1) The factors entering the model:
According to Table 2, the factors entered are social
conditions (SCS3) and relationships between supply and
demand of accounting thought (RBSDAT2).
2) The model with the entered factors:
According to Table 3, the model with the entered fac-
tors for IDBT evolution is as follows:
16
1.36 3.6672
1.667 3
I
DBTE ERBSDAT
SCS

 
 (2)
Note in the equation above, IDBT evolution is posi-
tively correlated with relationships between supply and
demand of accounting thought (RBSDAT2), but nega-
tively with social conditions (SCS3).
4.3. Selection and Analysis of Principal Factors
1) Selection of principal factors: As seen in the model
above, such factors as social conditions (SCS3) and rela-
tionships between supply and demand of accounting
thought (RBSDAT2) are entered, which indeed attracted
our further attention.
2) Analysis of principal factors’ influences:
a) Overview: From the analysis above, we have known
that all the factors’ influences are similar between corre-
lation analysis and regression analysis.
b) Detailed analysis:
Table 1. Correlations.
IDBTE
Pearson Correlation Sig. (2-tailed)
EL1 0.655 0.158
RBSDAT2 0.655 0.158
SCS3 –0.207 0.694
Table 2. Variables entered/removed.
Modelb Variables EnteredVariables RemovedMethod
SCS3
1 RBSDAT2a Enter
a. Tolerance = 0.000 limits reached. b. Dependent Variable: IDBTE.
Table 3. Coefficients.
Unstandardised
Coefficients Standardised Coefficients
Modela
B Std. Error Beta
Sig.
Constant –1.36E–16 1.491 1.000
RBSDAT23.667 1.721 0.800 0.123
1
SCS3 –1.667 1.361 -0.460 0.308
a. Dependent Variable: IDBTE.

Principal Factors Affecting IDBT Evolution
450
 Relationships between supply and demand of ac-
counting thought (RBSDAT2). It is positively cor-
related with IDBT evolution, because RBSDAT2
showed a progressive improvement steadily, and
promoted IDBT evolution gradually for a long time:
first, during the period of Double-entry Charac-
terization of AP, RBSDAT2 promoted AP thought
to present double-entry characteristic [3]. Secon-
dly, during the period of Double-entry Characteri-
zation of AG, RBSDAT2 promoted AG thought to
present double-entry characteristic. Thirdly, du-
ring the period of Loss and Net Income Accounts
(LNIA) and Partial AE, RBSDAT2 encouraged the
merchants to set up a new kind of accounts, loss
and net income accounts (LNIA), and got Partial
AE realized by getting all the accounts with goods
(AG) balanced [4]. Fourthly, during the period of
Capital Accounts (AC) and Complete AE, RBS-
DAT2 encouraged the merchants to set up a new
kind of accounts, capital accounts (AC), and got
Complete AE realized by getting all the accounts
balanced.
 Social conditions (SCS3). It should be positively
correlated with IDBT evolution, because social con-
ditions had showed some improvements, and pro-
moted IDBT evolution: first, during the period of
Double-entry Characterization of AP, the commer-
cial revolution in the period of 12th - 13th century
promoted AP thought to present double-entry cha-
racteristic [6]. Secondly, during the period of Loss
and Net Income Accounts (LNIA) and Partial AE,
Genoese city administration organized a campaign
of reforming accounting system by following
banking practice [4]. But because the improve-
ments for social conditions were not progressive
along time axis, and social conditions even had no
outstanding advance, especially in the important
periods for IDBT evolution, such as the period of
Capital Accounts (AC) and Complete AE, and the
period of Relatively Ripe IDBT, so social condi-
tions is negatively correlated with IDBT evolution
without doubt.
5. Principal Factors’ Contribution and
Sequence
Here we use principal component analysis to find princi-
pal factors’ contribution and order them in sequence by
their contribution.
According to Table 4, Kaiser-Meyer-Olkin Measure
of Sampling Adequacy (KMO) is 0.5. Though according
to the general rule it’s miserable for principal component
analysis, we still decided to perform this analysis so as to
know the principal factors’ contribution and their sequence.
According to Table 5, the contribution of the first co-
ent is 65.811%, the second 34.189%, and both of them
can explain 100% of variance, which can easily be seen
from “Screen plot” as follows:
According to Figure 1, it is steep from Component 1
to Component 2. That’s to say, the contribution becomes
smaller from Component 1 to Component 2. As there are
fewer factors, we choose both of the components to re-
flect and explain 100% of the variance.
Before ordering principal factors by their contributions,
we should analyze the selected two components above
according to Component Matrix and Rotated Component
Matrix.
According to Table 6 and Table 7 , Component Matrix
can reflect principal factors’ initial loadings, and Rotated
Component Matrix can make us see the difference be-
tween their loadings more easily and clearly. The first
Table 4. KMO and Bartlett’s test.
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.0.500
Approx. Chi-Square0.369
df 1
Bartlett’s Test of Sphericity
Sig. 0.544
Table 5. Total variance explained.
Component 1 2
Total 1.316 0.684
% of Variance 65.811 34.189
Initial Eigenvalues
Cumulative % 65.811 100.000
Total 1.316 0.684
% of Variance 65.811 34.189
Extraction Sums of
Squared Loadings Cumulative % 65.811 100.000
Total 1.000 1.000
% of Variance 50.000 50.000
Rotation Sums of
Squared Loadings Cumulative % 50.000 100.000
Figure 1. Scree Plot.

Principal Factors Affecting IDBT Evolution451
Table 6. Component matrix.
Componenta,b
1 2
SCS3 0.811 –0.585
RBSDAT2 0.811 0.585
a. Extraction Method: Principal Component Analysis. b. 2 components ex-
tracted.
Table 7. Rotated component matrix.
Componenta,b,c
1 2
SCS3 0.987 0.160
RBSDAT2 0.160 0.987
a. Extraction Method: Principal Component Analysis; b. Rotation Method:
Varimax with Kaiser Normalization; c. Rotation converged in 3 iterations.
component, i.e. social conditions can be named social co-
mponent, and the second component, i.e. relationships be-
tween supply and demand of accounting thought can be
named supply-demand relationship.
Seen from the analysis above, social component con-
tributed 65.811%, supply-demand relationship compo-
nent contributed 34.189%, and they both contributed
100% in total. We can also know that principal factors
can be ordered by contribution as follows: social condi-
tions (SCS3) and relationships between supply and de-
mand of accounting thought (RBSDAT2).
6. Clusion and Related Advice
By regression analysis, we have known that such two
factors as relationships between supply and demand of
accounting thought (RBSDAT2) and social conditions
(SCS3) are principal factors influencing IDBT evolution.
By component analysis, we have known that such two
components as social component and supply-demand re-
lationship component are principal components influenc-
ing IDBT evolution, social component contributed 65.811%,
and supply-demand relationship component contributed
34.189%. And we have also known that principal factors
can be ordered by contribution as follows: social condi-
tions (SCS3) and relationships between supply and de-
mand of accounting thought (RBSDAT2).
In one word, IDBT evolution has been affected mainly
by relationships between supply and demand of account-
ing thought (RBSDAT2) and social conditions (SCS3).
And our related advice is as follows: governments should
adopt appropriate policy, and help to build proper social
conditions and strengthen the relationships between sup-
ply and demand of accounting thought to promote the
evolution of accounting thought. Especially as to social
conditions, the evolution of Italian Double-entry Book-
keeping Thought (IDBT) is mainly owing to external
causes from the outside of Italy. Such causes as the Cru-
sades and the hub position of Italy connecting Europe
(including Italy) and the Oriental World played an im-
portant role for the development of Italian Double-entry
Bookkeeping Thought (IDBT). Once the outside motive
disappeared, IDBT would lose the strong power of evolu-
tion and slow down its pace. And it was just because of
the arriving in India by winding through the Hope Corner
in Africa in 1498, the discovery of America and the ac-
complishment of the trip all around the world in 1522
that the center of world economy and trade gradually
moved from the Mediterranean countries to the Atlantic
countries, and Italy had to transmit the title of Center for
Double-entry Bookkeeping Thought (DBT) to other coun-
tries, and social conditions are negatively correlated with
IDBT evolution without doubt. This is what we should
pay more attention when we study the evolution of Ita-
lian Double-entry Bookkeeping Thought (IDBT), and
governments should place more emphases on building
proper social conditions by encouraging internal powers
from the inside of Italy.
7. Acknowledgements
The authors acknowledge the financial support from the
Support Program for Young and Cadre Teachers of Henan
Province under Grant 200893 and the National Social
Science Foundation of China under Grant 06FZS005.
The authors also wish to acknowledge the helpful co-
mments and suggestions from such professors as Dao-
yang Guo (Middle-southern University of Finance and
Economics), Jianjun Du (University of Houston), Lei Fu
(Capital University of Economics and Business), Gian-
franco Cavazzoni (University of Perugia) and other par-
ticipants at the International Conference Jointly-Spon-
sored by the Accounting Society of China ＆ the Aca-
demy of Accounting Historians of U.S.A. at Chengde,
China, 2010.
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