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Annotation of pta/pta-glossary.7, Revision 1.1

1.1     ! schwarze    1: .\" $Id$
        !             2: .\"
        !             3: .\" Copyright (c) 2020 Ingo Schwarze <schwarze@openbsd.org>
        !             4: .\"
        !             5: .\" Permission to use, copy, modify, and distribute this software for any
        !             6: .\" purpose with or without fee is hereby granted, provided that the above
        !             7: .\" copyright notice and this permission notice appear in all copies.
        !             8: .\"
        !             9: .\" THE SOFTWARE IS PROVIDED "AS IS" AND THE AUTHOR DISCLAIMS ALL WARRANTIES
        !            10: .\" WITH REGARD TO THIS SOFTWARE INCLUDING ALL IMPLIED WARRANTIES OF
        !            11: .\" MERCHANTABILITY AND FITNESS. IN NO EVENT SHALL THE AUTHOR BE LIABLE FOR
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        !            13: .\" WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, WHETHER IN AN
        !            14: .\" ACTION OF CONTRACT, NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF
        !            15: .\" OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THIS SOFTWARE.
        !            16: .\"
        !            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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