Credited to North Korea. A widely repeated Korean claim holds that the method was invented in the Goryeo period, about 200 years before double-entry bookkeeping in the West. Whether such a practice existed that early is contested; surviving account books date from the late Joseon period.
How it began
The method was used by the merchants of Kaesong, a city now in North Korea that was called Songdo when it was the capital of the Goryeo dynasty. The Kaesong merchants were counted among the major merchant groups of the Joseon period. Their account books were in use from the late Joseon dynasty to the early 1900s. A study of Korean double-entry merchant accounts from Kaesong analyzed records running from 1786 to 1892.
How it works
The system is known as Sagae Songdo Chibubeop, sagae bookkeeping or Kaesong bookkeeping. The books consist of diaries and ledgers that correspond to the journal and general ledger of modern Western bookkeeping, together with various auxiliary books. A draft diary was kept first and a formal diary was written up from it. Researchers have used the surviving books to reconstruct a composite set of accounts and to analyze branch accounting.
Who pushed back
In Korea, the theory that this was the first double-entry bookkeeping in the world, invented in the Goryeo period about 200 years before the West, spread widely enough to be cited in papers and encyclopedias. There is controversy over whether such a practice existed that early. The surviving evidence consists of account books from the late Joseon period.
Where it stands today
The method is treated as one of the representative classical bookkeeping systems of Korea and is studied by accounting historians using records held in both North and South Korea. A complete translation of a commentary on the Songdo bookkeeping method was published in 2011. Kaesong itself has been under North Korean control since the 1953 armistice.
