Re: double-entry bookkeeping unneeded?

Thomas Gagne wrote:
topmind wrote:
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

Think of it as:
A: $10
B: $20
C: $15
D: $15

What are the letters here? In my example, they were account codes, such
as "cash", "accounts payable", etc.

Where the letters are the various account categories/codes (unspecified
here). It is still a form of "john bill 5".
The example, "john bill 5" was moving $5 from john to bill ( or the
reverse--it's hard to tell ).
Every individual
accounting transaction has to debit and credit 2 accounts. Traditional
accounting would do the above like this:

That is incorrect. The sum of debits and credits = $0. They aren't
necessarily symmetric--they just cancel each other out.


Isn't it: A = L + E rather than "= 0"? Summing to zero is not enough.

(Some account combinations are not permitted, to ensure this.)


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

-T-

.

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