USING THE DOUBLE ENTRY METHOD

In the Accounting History of Turkish states, after Tanzimat (administrative reforms) period (XIXth century) has a special importance. Economical and social structure had entered a rapid process of development. This process had significant effects on the thought of accounting. These effects appeared, firstly, at the legal arrangements about accounting. The most important of these was the Trade Law which was accepted in 1850. As for institutionalization, the state had established institutions such as Meclis-i Muhasebe (Accounting Assembly), Divan-ı Muhasebat (Accounting Chamber) in order to make accounting system updated. These institutions had contributed to the modernization of the accounting system of the state which has succeeded to survive under the names like Muhasebat Genel Müdürlüğü (General Management of Accounts) and Sayıştay (Court of Accounts). For example as a result of these developments the state budget had a modern look.

The second half of the 19th century had many features as for teaching accounting. It is hard to say that teaching accounting was adequately developed till then. Ottomans had used an unnamed accounting system for centuries on state accounting which was taken from the Ilhanian State and which was called as “Merdiven (Stairs) System” by them. This systems’ education had been done in master-apprentice relationship. By the second half of the 19th century Ottomans didn’t know and didn’t use the registering systems of accounting which Western

Europe countries had been using for centuries firstly under the name of Basic Accounting and then Double Entry System.

The Double Entry Method was also amongst the innovations which were taken from The Europe after the modernization movement on administrative and social issues which was announced in 1839 called the Tanzimat Edict.

It has been known that in the last thirty or forty years of the century in question accounting education, including the double entry method, had been taught in secondary schools (Rüştiye), high schools (İdadi), law and technical schools. The rapid development of the printing had eased the expansion of this education. It has been seen that accounting education books had been pressed mostly but not only on general accounting but also on some specific issues such as agricultural accounting.

By the end of the 19th century the state had started to use the double entry system on state accounting and on the other organizations of state. These efforts, which were intensive at the last thirty years of the century, had been very important for the history of Turkish Accounting. If the Republic period had some achievements it can’t be denied that it was the result of the intensive and self- devoted efforts at that time.

One of the successful samples of the Westernization and modernization process is, absolutely, the efforts to accept the double entry method in a short time on education and application which had no basic facilities.

It will be better to tell more about this entrance. A country may use a different accounting system. If there is a accounting culture in that country, it may be easier to change accounting system or to accept a new one. Thus, in state accounting it took a period for Ottomans to use double entry method. This had been possible as a result of state accounting culture which occurred with using the Merdiven (Stairs) System used for about 600 years.

Because private sector accounting in Ottomans wasn’t very well developed, it had been possible for private sector to accept the double entry system at the Republican period. For that delay in addition to lack of accounting culture, lack of capital, inadequate production and commerce experience and capitulations had been effective.

The most important effect of the capitulations was reducing or removing the custom taxes in importing. This case had fastened the importing of food and households produced in Europe. As a result of this, production facilities had

stopped which caused the decrease of capital and postponed the industrialization and consequently, developed increasing importing and increasing agricultural goods based exporting accounting, developed the expansion of double sided accounting system. But because this trade was mostly controlled by foreigners these developments occurred mostly in foreign organizations not in Turkish ones.

That was one of the reasons why accounting teaching books, at the second half of the 19th century, were mostly about the needs of commercial organizations rather than the needs of industrial organizations.

It has been seen that the double entry system, which is more complex than the simple accounting, had gained a global importance at the 19th century. The reason this system had expanded is that the importance which was held for the teaching of this system in accounting education. The concern for this system on both Ottomans state and private sectors had resulted in giving a place to accounting in schools’ curriculum.

Because it couldn’t be expected the accounting system to be out of innovations while the state organizations were in after Tanzimat Edict, the sate had led to the double entry system. While trying to adopt its own accounting system to the double sided accounting system, the state, had also given a place for accounting in school curriculum to set a background for this system. The importance held for teaching accounting had a great part for the expansion of double entry system.

For this eagerness for accounting education there was a need for teaching accounting book for simple accounting and double sided accounting. Because French was common in the Ottomans under the effect of Westernization, French accounting books were mostly used in higher education organizations. Turkish accounting education and application was being introduced to the double entry system without knowing the simple accounting system which was the pioneer of the double sided one in Europe. The old system of Ottomans had no resistance against this new system and accepted the double entry system (Güvemli, 2000b, 595-597).

Ottoman Empire, officially, announced that they had left the Merdiven (Stairs) Method in state accounting and started to use double entry method in 1879.

4. RESULT

The Merdiven (Stairs) system, between the 16th and 19th centuries in the Middle East İlhanian State, Seljhuk State, and the Ottomans used in state accounting, is

understood to be an accounting method consistent in itself, able to cover the needs of the era.

The reason why this accounting system had occurred and developed was that not only Ilhanian State but also Ottomans, desired their tax incomes to keep alive and fruitful and to control state outcomes. From the accounting teaching books about Merdiven (Stairs) system taken from Ilhanian State and from the applications seen on the accounting notebooks of Ottomans it was understood that the Merdiven (Stairs) system had lived its process of generation in Ilhanian State and its development process in the Ottomans. It was seen that the Merdiven (Stairs) system ended giving its place to double entry method in the 19th century.

Merdiven (Stairs) system had got some features. One of these was that it was a method used to register events happened in Ilhanian State and it was a method used to register according to the accrual aspect in Ottomans where it had lived its development process.

Merdiven (Stairs) system was born in a state accounting system. But in the Ottomans this system was broadly used in both state accounting and organizations which could be considered as public organizations such as foundations, shipyards and customs which have income and outcome.

Merdiven (Stairs) system was not based on finding out profit. On the other hand for some organizations such as shipyards and customs it was observed to be used for matching incomes and outcomes and cost accounting in some organizations.

Because Merdiven (Stairs) method was a method of state accounting it was not based on inventory, too. On the other hand, it was an efficiently used method to find out wealth of the state and outcomes.

Another feature of the Merdiven (Stairs) system was that siyakat writing and numbers were used. Siyakat writing uses Ottoman language with Arabic letters without full stops in accounting registers. There were two reasons for that: by using siyakat writing it was possible to write more on the narrow places and to provide secrecy for the incomes and outcomes of the state.

As the double entry system was developed in the writing culture which was from left to right, Merdiven (Stairs) method was born and developed in accordance with Ottoman language, Arabic and Persian writing structure which is from right to left.

The usage of Merdiven (Stairs) system was officially over between 1879- 1880 as a result of the entrance and expansion of double entry system in Turkey towards the midst of 19th century in the modernization movement process of Ottoman Empire.