Re:Double Entry Accounting for Developers
by verytrivial on Tuesday July 28, 2020 @11:33AM
(#23976818)
FWIW I did an accounting elective at college and ran the books for a small business for a couple of years. I'm comfortable with the conventions :-) I was just saying OP was choosing to encode the conventions differently internally and display them a different way to meet the external convention, like GMT+TZ. You need never known your computer stores time in GMT and most people don't, even the accountants.
In beancount, the accounting equation is Expense+Income+Equity=0 and all signs are always left intact (there is only addition).
So you start a company with a seed capital of $5. You borrow $5 to the bank, buy an expensive apple for $10, sell it for $15 and give the money back to the bank with an interest of $1, then close the exercise and carry the profits (don't distribute dividends). Your ledger is:
Notice how every transaction balances to 0 just by summing it, no need to remember anything.Now, you're at the beginning of the next exercise. To know your accounts you just compute a sum of every operation to it, again no special case. So your accounts are:
And yet again, the sum of all of that is 0.Personally I like it, not having any special cases. Yes, it may confused an accountant (because they learned the special cases by heart ! Somebody coming with a fresh mind has no reason to be confused, it's all just conventions !) but it's simpler for me and just as consistent.