Re: double-entry bookkeeping unneeded?


Thomas Gagne wrote:
I've written multiple financial OLTP systems and can confidently say
there's no such thing as "john bill 5".

A transaction system must be able to record:

Check for $10.
Cash for $20.
Deposit to checking $15.
Payment to line-of-credit: $15.

These are 4 *separate* transactions, aren't they? It is still:

A, B, 10.00
C, D, 20.00
E, F, 15.00
G, H, 15.00

Where the letters are the various account categories/codes (unspecified
here). It is still a form of "john bill 5". Every individual
accounting transaction has to debit and credit 2 accounts. Traditional
accounting would do the above like this:

A, 10.00
B, -10.00
C, 20.00
D, -20.00
E, 15.00
F, -15.00
G, 15.00
H, -15.00

Which is bad normalization. As far as a larger grouping of multiple
transactions, that is not the issue here that I can see. As far as
"splitting" a check, first it is deposited, and then divied up in
further/later transactions.


or perhaps

Check for $100.
Interest payment: $98.
Principle payment: $2.

These are all examples of double-entry/balanced transactions.
Double-entry is a misnomer. It's not so much as recording the same
information twice as much as it is creating smaller transactions and
building bigger transactions out of them.

--
Visit <http://blogs.instreamfinancial.com/anything.php>
to read my rants on technology and the finance industry.

.

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