Re: accounting schema

Thanks Steve...
This is all well and good...I am getting it...but I need to chew on it
more....gnucash was a good one...didn't think of that....got to get passed
all the GUI stuff...but...excellent ref...

I suppose instead of AR and AP tables, I can just have one table called
Entry (thanks Joe....) with an attribute indicating AR vs AP.

I am also in favor of Double Entry and accrual posting....what do I know, I
hear corporations do it this way...

I also like the "audit trail" built-in feature...actually this was something
I was baffled about...I was originally thinking about editing capability,
but what you are suggesting is that in practice, you don't change or erase
anything...to make a correction, you debit and then credit (keeping the sum
happy) and yet you have the audit trail...very cool...I am liking this
stuff...

And finally you mentioned that bank accounts are tricky...can you expand on
this please. After all I am under the impression that "bank accounts" are a
corner stone of this whole book keeping...I mean...bank accounts have debits
and credits just like any account...eg interest earned is a credit and bank
fees are debits...what worries you about bank accounts...

Thanks guys...this is very very nice

Medi

On Feb 6, 2008 6:35 PM, Steve Midgley <public(at)misuse(dot)org> wrote:

> At 05:09 PM 2/6/2008, pgsql-sql-owner(at)postgresql(dot)org wrote:
> >Date: Wed, 6 Feb 2008 17:08:54 -0800
> >From: "Medi Montaseri" <montaseri(at)gmail(dot)com>
> >To: pgsql-sql(at)postgresql(dot)org
> >Subject: accounting schema
> >Message-ID:
> ><8078a1730802061708q17c72234xe61be822459a24a8(at)mail(dot)gmail(dot)com>
> >
> >Hi,
> >
> >I am learning my way into Accounting and was wondering how Accounting
> >applications are designed. perhaps you could point the way....
> >
> >On one hand, accountants talk about a sacret equation A = L + OE
> >(Asset =
> >Libility + Owner Equity) and then under each categories there are one
> >or
> >many account. On the other hand a DBA thinks in terms of tables and
> >relations. Instead of getting theoritical, allow me to setup an
> >example
>
> Hi Medi,
>
> You might read some source code and docs for open source accounting
> software and see "how it's done." Here's one example that might be
> interesting and simple enough to follow:
>
> http://www.gnucash.org/
>
> In general, I think there are many different accounting methods, so you
> have to get clear about which one you're using. "Double-entry"
> accounting is common. Cash vs. accrual posting methods matter (i.e.
> when does an expense or receivable "charge" against the assets
> balance?)
>
> My most basic understanding is that in general you track assets as they
> come in, to an "Accounts Receivable" ledger (i.e. table) and
> liabilities to an "Accounts Payable" ledger. Then you reconcile these
> two "books" into a "General Ledger" table which gives you something
> like an audit trail of all activity (and a running balance). I'm sure
> Wikipedia will define these three terms and lots more with greater
> clarity.
>
> But my (limited) experience with accounting schema is that they often
> involve these three tables (AR/AP/GL) at their core.
>
> As you add bank accounts, complex investment instruments, depreciation
> etc, things get considerably more complex of course.
>
> I'll readily admit my limited experience, and I'm sure others on this
> list have far better information. I hope this gets you started anyway.
>
> Sincerely,
>
> Steve
>
>