The evolution of bookkeeping methods is one of the main features in the advance of Chinese accounting over several thousand years. This paper outlines the invention and application of Chinese-style bookkeeping methods from a historical perspective. With an emphasis on the rise and fall of the 'increase-decrease' bookkeeping method in the mid-1960s to 1980s, the paper not only illustrates the main characteristics of this bookkeeping system, but also analyses its relative strengths and deficiencies in contrast to the Italian-style debit-credit bookkeeping system. It is contended that the increase-decrease system is a continuing innovation of the Chinese-style bookkeeping and an attempt to adapt the western bookkeeping system in terms of the Chinese social and cultural traditions. Studies of this bookkeeping system may generate certain insightful input for the potential improvement of modern bookkeeping in other countries in light of the changing technological and economic conditions.