MLMD -Chapter 130 The Debit–Credit Accounting Method

April 13, the Seventh Year of Chongzhen (1634), Yingzhou City, Inner Courtyard of the Mingwei General’s Residence

Yue Yang sat in his study, flipping through the ledger in his hands while rapidly clicking the abacus on the desk. At another table beside him sat the Linglong sisters. Each of them had several account books laid out in front of them, which they were earnestly flipping through, pencils in hand as they continuously wrote something down.

“Husband, how do you calculate this problem?” Yu Long asked, holding a ledger and frowning her delicate brows as she came over to Yue Yang.

Yue Yang took the book, glanced at it, and nodded. “Mm… let me see. Ah, this one. Look, this account is calculated like this…”

After Yue Yang explained for quite some time, Yu Long finally understood and happily returned to her sister’s side to continue working.

As Yue Yang’s official rank rose higher and higher, the number of matters he had to deal with also increased. In theory, as the Northern Shanxi Route Guerrilla Commander—a dignified fourth-rank official—he was already considered a mid-level official, and routine affairs under him should have been handled by dedicated personnel. However, what troubled Yue Yang was that he was still sorely lacking in commercial and managerial talent. His former steward, Yue Laifu, had been dispatched to manage the industrial park, while Hailou had been sent to oversee land reclamation and military farming. Every day, all kinds of reports were delivered to the residence. Just handling these matters already drained Yue Yang’s energy, leaving him with little time to manage military affairs, yet he still had to divide his attention to oversee the household accounts.

By common sense, the household’s financial authority should have been entrusted to Hailanzhu, his principal wife. Yet Yue Yang discovered, to his frustration, that his wife harbored what seemed like a deep, instinctive hatred toward mathematics. The moment she looked at a ledger, she would become drowsy in the shortest possible time. She would much rather sit in the secret chamber, tirelessly analyzing intelligence dossiers sent up from below all day long, than pick up an account book and look at it for even a single minute.

Left with no choice, Yue Yang had to personally take on the role of chief accountant of the household. One day, however, he happened to notice that the Linglong sisters liked to hover nearby whenever he was doing the accounts. Out of curiosity, Yue Yang jokingly asked them a few accounting questions, only to find that they were actually able to answer. Both surprised and delighted, he began teaching the sisters Arabic numerals. In less than a week, the two of them were already able to tentatively start working through the ledgers on their own.

“Eight thousand three hundred and thirteen soldiers; monthly grain expenditure: three thousand five hundred shi; converted to silver: three thousand seven hundred eighty-two taels, one qian, eight fen, five li, and three hao.”

“Purchased two thousand one hundred twenty-three piglets, at six qian, one fen, and two si of silver per head; total silver: one thousand three hundred ninety-eight taels, seven qian, nine fen, and four li…”

“Consumed one thousand eight hundred forty-two bolts of cloth, at three qian, two fen, and three li of silver per bolt; total silver…”

Yue Yang checked and tallied each item one by one. After an unknown amount of time, he finally let out a long breath. After two days of inventory and verification, he had finished sorting and reconciling the accounts. It was clear that his steward, Cao Youqian, had been quite conscientious—the accounts were basically accurate and detailed, with no evident falsification. What dissatisfied Yue Yang, however, was that the accounting methods currently used in the Ming dynasty were far too simple and crude to be truly satisfactory.

At present, Ming merchants generally used the “Heaven-and-Earth Account” method, also known as the “red-out, black-in accounting method,” where expenditures were recorded in red ink and income in black. Compared to later double-entry bookkeeping, this method was extremely rudimentary. The earliest Chinese double-entry bookkeeping system—the Longmen accounts—would only emerge in the late Ming period (around 1640), and was said to have been created by the Shanxi native Fu Shan.

Yet neither the Heaven-and-Earth method nor the Longmen accounts satisfied Yue Yang. Thus, he introduced the debit–credit accounting method commonly used in later generations. This method was an improvement and refinement upon double-entry bookkeeping.

The debit–credit accounting method is based on the theoretical equation “Assets = Liabilities + Owner’s Equity.” It uses “debit” and “credit” as bookkeeping symbols, following the rule that “every debit must have a credit, and debits and credits must be equal.”

Structurally, the debit–credit method divides accounts into left and right sides. The left side is called the debit side, and the right side the credit side. Debits are recorded on the left, credits on the right. When assets increase, they are recorded on the left; when assets decrease, on the right. When liabilities increase, they are recorded on the right; when liabilities decrease, on the left.

Compared to the Ming dynasty’s “red-out, black-in” method, this system could better prevent and reduce accounting errors. It also allowed for more flexible account structures, facilitating analysis and management of one’s assets. Naturally, it was far more advanced.

When Yue Yang had forcibly ordered the teaching of Arabic numerals and the debit–credit accounting method some days earlier, there had initially been a chorus of complaints from below. Yet after some time, the complaints disappeared. The shop managers and accountants were astonished to discover that this method was far more rigorous and effective than their old one, plugging many loopholes in the books. Moreover, with the use of Arabic numerals, previously complex calculations became simple. What once took a full week to compute could now be completed in less than a day—efficiency had increased by more than tenfold.

Yue Yang put away the ledgers and took a sip of hot tea, feeling warmth spread through his body. He leaned back in his chair and closed his eyes to rest. After a while, a pair of soft hands gently pressed against his temples and began to massage them with just the right amount of pressure. Then, a peeled grape was placed into his mouth. After swallowing it in one gulp, Yue Yang leaned over and kissed the hand holding the grape, eliciting a few coquettish protests. The culprit, however, paid them no mind, quickly swallowing the grape and reclining in the chair, humming contentedly like a well-fed pig.

After eating seven or eight grapes, Yue Yang asked, “Long’er, Ling’er, have you both memorized the debit–credit accounting method?”

“We’ve memorized it all,” Long’er said, her large eyes sparkling with admiration. “Husband, these days the shop managers and accountants down below are all praising you. They say the accounting method you introduced is extremely rigorous and useful, something they’ve never seen in their lives. And those Arabic numerals are also incredibly convenient. You’re truly amazing!”

“Uh… Long’er, I’ve said this several times already. I didn’t create that accounting method—it was created by those Westerners,” Yue Yang replied. Though he didn’t consider himself thin-skinned, he still found it hard to withstand such praise from his beautiful wife.

“Anyway, all the accountants say they’ve never seen such an impressive accounting method before,” Yu Long pouted slightly in protest. In her simple mind, her husband was the most capable man in all of Great Ming—bar none.

Yue Yang wrapped an arm around Yu Long’s slender waist. A faint fragrance drifted toward him. Though it no longer had the freshness of a maiden, the deeper, soothing scent was even more intoxicating. He gently kissed her cherry lips and smiled. “Alright. I know you and your sister want to help share my burdens, and I believe you can do it well. But don’t overwork yourselves—always act within your limits, understand?”

“Mm!” Yu Long, like the most obedient little kitten, nestled into her husband’s arms, breathing in his familiar scent as she comfortably closed her eyes. The reason she and her sister studied accounting so diligently was precisely to shoulder some of Yue Yang’s burdens. The old matron had once told them that if they wished to become women cherished by their husband, they must strive to be capable helpmates rather than burdens. And now, they were working toward that very goal.

While Yue Yang and the Linglong sisters were enjoying this rare moment of leisure, a group of people was walking along the streets of Wuli Village.

At the front were two men. One was a man in his forties, dressed in a blue robe. He had fair skin, a tall build, and a lean face, with a naturally imposing air that commanded respect even without anger. Beside him was a middle-aged scholar in long robes.

Following them were four obvious attendants, each with a long blade hanging from his waist and a horse in hand.

The leading middle-aged man was none other than Lu Xiangsheng, newly appointed by imperial decree as Governor-General of Xuanfu and Datong. Beside him was Yang Tinglin, who had accompanied him for many years as his chief aide.

Looking at the bustling crowds around them, Lu Xiangsheng could not help but praise, “Boxiang, before coming here I often heard people in the capital talk about Wuli Village, but I never quite believed it. Seeing it with my own eyes today, I finally do. This Yue Yang is truly a capable man.”

Yang Tinglin nodded. “Indeed. A few years ago, I passed through this place as well. Back then, Wuli Village was a desolate place with barely ten thousand people, most of whom lacked food and clothing. But look at it now—this is an entirely different scene.”

Compared to two years earlier, the changes in Wuli Village were indeed dramatic. First of all, there were far more people on the streets. Originally, the entire village had only one main street less than five hundred meters long. Now, two additional streets had been opened nearby. Because Yue Yang had recruited refugees for military farming and established so many factories, while the original population of Wuli Village had been small, many farmers and refugees from other areas flocked here, significantly increasing the population. The most visible result was the greatly increased foot traffic on the streets.

Secondly, the appearance of the villagers themselves had changed greatly. In the past, most people on the streets were ragged and emaciated. Such sights were now rare. Faces were rosy, and many wore new clothes. Compared to the numbness once etched on farmers’ faces, people now bore smiles filled with hope and yearning for a better life. These smiles seemed to bring vitality, giving Wuli Village a completely different spirit.

As for the buildings along the streets, while many thatched huts remained, even more tiled houses were under construction. In any dynasty, building a house was a top priority for the Chinese people. Once they had surplus money, the first thing they thought of was building a home. Where there was demand, there was a market. Many shrewd merchants promptly set up brick kilns around Wuli Village to fire bricks and tiles, and business was booming. Though Wuli Village still looked somewhat chaotic, it gave off a clear sense of vigorous growth and prosperity.