Balancing the Books: Convergence and Diversity of Accounting in Massachusetts, 1875–1895

Caitlin Rosenthal

The Journal of Economic History, 2020, vol. 80, issue 3, 782-812

Abstract: The late nineteenth century is often described as an era of innovation in managerial practice, including accounting. However, despite rich case studies of individual firms, we have little quantitative knowledge of average practices. This paper uses errors and omissions in balance statements to estimate the prevalence of double-entry bookkeeping and depreciation at Massachusetts corporations between 1875–1895. In 1875, 62 percent of firms balanced their returns, but by 1895 this number exceeded 96 percent. The proportion considering depreciation increased from 18 to 24 percent over the period. Firms using these techniques survived longer on average.

Date: 2020
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