Annotation of pta/pta-glossary.7, Revision 1.1
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! 17: .Dd $Mdocdate$
! 18: .Dt PTA-GLOSSARY 7
! 19: .Os
! 20: .Sh NAME
! 21: .Nm pta-glossary
! 22: .Nd fundamental terms used by the plain text accounting program
! 23: .Sh DESCRIPTION
! 24: The following terms are fundamental to understanding
! 25: .Xr pta 1
! 26: and are used consistently throughout the documentation:
! 27: .Bl -tag -width Ds
! 28: .It Em account entry
! 29: A record containing the following fields:
! 30: .Bl -tag -width Ds -compact
! 31: .It year
! 32: a four-digit unsigned integer
! 33: .It month
! 34: an integer in the range from 1 to 12
! 35: .It day
! 36: an integer in the range from 1 to 31,
! 37: typically used for the day of booking
! 38: .It id
! 39: a string which does not need to be unique,
! 40: typically used for booking identifiers or booking numbers
! 41: .It amount
! 42: a floating point number, with the currency always being the same
! 43: .It text
! 44: a string, typically used to state the purpose or the business partner
! 45: .El
! 46: .Pp
! 47: Account entries are used to describe all sorts of values (assets,
! 48: liabilities, and equity) and payments (both incoming and outgoing).
! 49: They can represent anything that has a well-defined monetary value.
! 50: .It Em account
! 51: A list of account entries, ordered chronologically.
! 52: Each account is uniquely identified by an unsigned integer number
! 53: called the account number.
! 54: Use accounts to collect entries that serve a common purpose.
! 55: Accounts can represent assets (e.g. cash in the wallet, bank accounts,
! 56: invoices issued to customers, stocks of goods, real estate, business
! 57: equipment, securities, and so on),
! 58: liabilities (e.g. credit card accounts, invoices received that need
! 59: to be paid, and so on), equity (e.g. outstanding shares), revenues
! 60: (e.g. for services rendered, for goods sold, or interest received),
! 61: and expenses (e.g. for goods bought, for travel costs, or for
! 62: interest paid).
! 63: .Pp
! 64: Define such accounts as are meaningful for the purpose of the
! 65: specific bookkeeping in question.
! 66: Many standardized systems of accounts exist;
! 67: using one of them may help clarity and consistency,
! 68: but it is not required.
! 69: Even when using a standardized system of accounts, it is typically
! 70: sufficient to define and use only a small subset of the accounts
! 71: specified by the standard.
! 72: .Pp
! 73: The meaning of the sign certainly needs getting used to:
! 74: .Pp
! 75: .Bl -column "account class" -compact
! 76: .It Em account class Ta Em meaning of the sign
! 77: .It assets Ta property owned has negative sign
! 78: .It equity Ta property owned has positive sign
! 79: .It liabilities Ta debt owed has positive sign
! 80: .It revenues Ta incoming payments have positive sign
! 81: .It expenses Ta outgoing payments have negative sign
! 82: .El
! 83: .Pp
! 84: Accounts are defined in
! 85: .Xr pta-accounts 5
! 86: and the content of accounts can be displayed with
! 87: .Xr pta 1
! 88: .Fl a .
! 89: .It Em journal entry
! 90: A record containing the same fields as an account entry,
! 91: but two account numbers in addition, called the
! 92: .Dq debit account
! 93: and the
! 94: .Dq credit account ,
! 95: always cited in this order.
! 96: A journal entry describes an elementary business transaction,
! 97: in the sense that it subtracts the amount from the debit account
! 98: and adds the same amount the credit account.
! 99: For example, when paying off a debt, the debit account would typically
! 100: be a liability account (subtracting something there means reducing
! 101: the debt) and the credit account would typically be an asset account,
! 102: usually a bank account (adding something there corresponds to
! 103: reducing the bank balance).
! 104: .Pp
! 105: Creating a journal entry implicitly creates a corresponding account
! 106: entry on the debit account, inverting the sign of the amount, and
! 107: another corresponding account entry on the credit account, with the
! 108: amount having the same sign as in the journal entry.
! 109: Consequently, creating a journal entry always leaves the sum of all
! 110: accounts constant, and since that sum starts at zero, it always
! 111: remains zero.
! 112: .Pp
! 113: Complex business transactions \(em for example purchases including
! 114: sales tax or buying items of diverse kinds in a single transaction \(em
! 115: are typically represented using multiple journal entries.
! 116: .It Em journal
! 117: A list of journal entries, ordered chronologically.
! 118: It is typically used to represent all business transactions that
! 119: occurred during one accounting period, typically during one year.
! 120: .Pp
! 121: The format of the journal file is documented in
! 122: .Xr pta-journal 5 .
! 123: .It Em subaccount
! 124: A subaccount is a subset of the account entries of an account.
! 125: Each subaccount is uniquely identified by the pair (account number,
! 126: subaccount name).
! 127: For example, an account for fruits might contain subaccounts
! 128: for apples and oranges.
! 129: Currently, subaccounts cannot be divided further.
! 130: For example, a sub-subaccount for Granny Smith within the subaccount
! 131: for apples is not supported.
! 132: .Pp
! 133: While accounts need to be predefined in the file
! 134: .Pa accounts.txt
! 135: before they can be used in the journal, an important advantage of
! 136: subaccounts is that they can be used spontaneously.
! 137: As soon as at least one account entry is associated with a subaccount,
! 138: that subaccount exists.
! 139: .Pp
! 140: An account entry can either be part of exactly one subaccount,
! 141: or it can be outside all subaccounts.
! 142: For example, a shipment containing both apples and oranges should
! 143: probably be split into two entries, such that each entry can be
! 144: associated with the appropriate subaccount.
! 145: On the other hand, a surprise shipment of martian lichen leaves
! 146: the choice of either booking it without specifying any subaccount,
! 147: for example because such exotic merchandise is not expected to
! 148: arrive again, or of creating a subaccount for martian lichen
! 149: on the spot.
! 150: .Pp
! 151: The content of subaccounts can be displayed with
! 152: .Xr pta 1
! 153: .Fl s .
! 154: .It Em cost center
! 155: A cost center is a set of journal entries.
! 156: Consequently, while a subaccount is restricted to one single account,
! 157: a cost center always spans multiple accounts.
! 158: Use cost centers to track the balances
! 159: of parts of the bookkeeping separately.
! 160: For example, if a company has a number of branch stores,
! 161: one might create a cost center for each branch store
! 162: and another one for the head office.
! 163: As another example, if a company has a number of very different
! 164: product lines, one might create one cost center for each product
! 165: line.
! 166: There is no rigid prescription how cost centers can be used;
! 167: any set of journal entries can be defined as a cost center.
! 168: Currently, cost centers need to be disjunct and cannot be subdivided.
! 169: .Pp
! 170: Cost centers are also used to manage financial investments.
! 171: Create one cost center for each security, and book all related
! 172: transactions to that cost center, including purchases, sells,
! 173: payments of interest or dividend, surcharges, fees, and taxes.
! 174: This allows tracking the performance of each security individually.
! 175: .Pp
! 176: Account lists and balance sheets for cost centers
! 177: can be displayed with
! 178: .Xr pta 1
! 179: .Fl c ,
! 180: and profits and losses can be shown with
! 181: .Xr pta 1
! 182: .Fl p .
! 183: .El
! 184: .Sh SEE ALSO
! 185: .Xr pta 1 ,
! 186: .Xr pta-accounts 5 ,
! 187: .Xr pta-journal 5
! 188: .Sh AUTHORS
! 189: .An Ingo Schwarze Aq Mt schwarze@openbsd.org
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