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This study examines how bookkeeping was used to determine the financial results of the Datini Partnership in Pisa in the late 14th century. It highlights the difference between accounting procedures in a medieval partnership and accounting procedures in individual medieval enterprises and over time. Building upon previous studies, the analysis of archival documents and the construction of a model of the flow of information between accounts and account books reveals the details of the bookkeeping procedures in the firm and a complete picture of the calculation of the financial result of the partnership in 1394. The study found that the need for the partnership to identify profits resulted in a change in the bookkeeping method for inventory that improved the information quality when used in the process of identifying operating results and the overall financial result. JEL Classifications: M41; N83. [ABSTRACT FROM AUTHOR]

This paper examines the Profit on merchandise accounts (a forerunner of the income statement) in a sole proprietorship in Pisa that officially operated between 1386 and 1392, but took several months to finally end its activities, which it did in 1393. The Profit on merchandise account was where the balance on each goods account was transferred when all the items recorded in it were sold. The principal contribution of this paper is the identification of a unique approach to medieval product costing that ensured indirect expenses on merchandise were recovered from customers when sales took place, while earning an average return of over 10 percent on those costs. It also highlights the problems encountered when working with archival material that has deteriorated over time; and presents a research method that reconstructs missing data using the trail to original entries and contra entries recorded in double entry. [ABSTRACT FROM AUTHOR]