Changes Bringing about Annual Reporting

Although a summary of all assets and liabilities can be drawn up at any time to determine whether the owners' claims had increased or decreased (a profit or loss had been made) the task using a manual, hand-written and abacus-calculated set of books was extremely time-consuming, and likely to be less than accurate. Consequently, books were often kept for years, individual accounts being balanced at the end of each ledger page, but never balanced simultaneously. As trading operations grew larger, partnerships were often formed to provide the larger sums of capital required. When partners left or died it was necessary to balance the books and determine what was due to each partner so balance sheets were more frequently produced.