Aggregation is a pervasive theme in accounting. The preparation of financial statements involves extensive aggregation---information regarding several transactions is summarized using a few account balances. In this article, we study linear, double-entry aggregation rules. The level of...

A pervasive theme in both accounting and statistics is aggregation. However, in contrast to statistics, a customary standard for determining the best aggregation rule in accounting is unavailable or, at least, not explicitly defined. Also, most accounting procedures follow a well-specified...

In this paper we examine a simple but suggestive setting in which the income number arises naturally (and directly) from competitive markets. While no explicit assumptions are made about individual firm's objectives, it turns out that equilibrium is consistent with the maximization of a number...

We formally establish the link between linear algebra and the double entry bookkeeping system: the system transforms a vector of numerical values corresponding to transaction amounts to a financial statements vector through matrix multiplication. The matrix is called a generator matrix (it is...