.\" $Id: pta-accounts.5,v 1.3 2020/10/04 13:00:24 schwarze Exp $
.\"
.\" Copyright (c) 2020 Ingo Schwarze <schwarze@openbsd.org>
.\"
.\" Permission to use, copy, modify, and distribute this software for any
.\" purpose with or without fee is hereby granted, provided that the above
.\" copyright notice and this permission notice appear in all copies.
.\"
.\" THE SOFTWARE IS PROVIDED "AS IS" AND THE AUTHOR DISCLAIMS ALL WARRANTIES
.\" WITH REGARD TO THIS SOFTWARE INCLUDING ALL IMPLIED WARRANTIES OF
.\" MERCHANTABILITY AND FITNESS. IN NO EVENT SHALL THE AUTHOR BE LIABLE FOR
.\" ANY SPECIAL, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
.\" WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, WHETHER IN AN
.\" ACTION OF CONTRACT, NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF
.\" OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THIS SOFTWARE.
.\"
.Dd $Mdocdate: October 4 2020 $
.Dt PTA-ACCOUNTS 5
.Os
.Sh NAME
.Nm pta-accounts
.Nd account definition list for plain text accounting
.Sh DESCRIPTION
The file
.Pa accounts.txt
in the current directory defines the accounts that can be used in the
.Xr pta-journal 5
file.
Like all
.Xr pta 1
input files, it is an
.Xr ascii 7
text file using strings of one or more space characters
as the field delimiter and using the hash character
.Pq Sq #
in the first column to mark lines as ignored.
.Pp
In this manual page, terms defined in
.Xr pta-glossary 7
are
.Em emphasized
when first used.
.Ss Line syntax
Each line in the accounts file defines one
.Em account
and consists of three fields:
.Bl -enum
.It
The unsigned account number, consisting of one or more decimal digits.
Leading zeros are permitted.
.It
The account type, encoded as a single capital letter:
.Pp
.Bl -tag -width 1n -compact
.It Cm A
asset account
.It Cm L
liability account
.It Cm Q
equity account
.It Cm R
revenue account
.It Cm S
statistical account
.It Cm X
expense account
.El
.It
The account title.
This is an arbitrary string.
It can contain space characters.
.El
.Ss Account numbers
Usually, account numbers consist of three to five digits, to provide
enough space for a systematic, hierarchical organization, such that
ranges of accounts can be used for accounts of similar types and
purposes.
For example, as one possibility among many, an account system
might use:
.Pp
.Bl -tag -offset indent -width 4n -compact
.It 0xxx
for fixed assets
.It 01xx
for intangible assets
.It 02xx
for real estate
.It 06xx
for business equipment
.It 09xx
for securities
.It 1xxx
for current assets
.It 12xx
for accounts receivable
.It 16xx
for cash
.It 17xx
for bank accounts
.It 2xxx
for equity
.It 3xxx
for liabilities
.It 4xxx
for revenues
.It 5xxx
for expenses
.It 9xxx
for statistical accounts
.El
.Pp
It is recommended but not required that all account numbers
in a given bookkeeping file have the same length.
.Ss Account types
To correctly assign account types, it is crucial to remember the
following distinctions.
.Pp
Balances on asset, liability, and equity accounts
represent sums of values.
In the case of assets, these are values available to the natural
or legal person doing the bookkeeping, no matter who ultimately
owns them, like cash in the wallet or goods on the shelf,
even if some of the goods have been bought on credit.
Assets are classified accourding to the physical or legal form
they currently take.
.Pp
The sums of assets always equals the sum of equity and liabilities,
but in the case of equity and liabilites, this same sum is
subdivided according to who actually owns the values, and in which
legal form, no matter in which physical form the value is currently
available.
.Pp
Equity is the value owned by the legal person themself, for example
outstanding shares, private deposits by the owner of the business,
and retained earnings.
.Pp
Liabilities are values owed to other legal persons, for example
credit card balances, accounts payable, mortgages, or issued bonds.
.Pp
In contrast to assets, liabilities, and equity,
revenues and expenses do not represent values at rest
but changes of values, or more specifically, changes of equity,
or even more specifically, changes of retained earnings.
Revenues represent increases of equity;
expenses represent decreases of equity.
.Pp
For example, buying an apple and eatiing it is an expense,
reducing equity.
On the other hand, buying twenty boxes of apples and displaying
them for sale in a shop is not an expense
but acquiring a current asset (goods for sale).
.Pp
If these distinctions seem confusing, designing a new account
system from scratch is discouraged and using a subset of an
existing, standard account system is recommended instead
because misclassification of accounts is likely to yield
wrong results in the balance sheet.
.Ss Statistical accounts
Statistical accounts are accounts that neither appear on the balance
sheet nor in the lists of revenues and expenses.
If a journal entry contains a statistical account,
the contra account must be a statistical account, too.
Such accounts can be used to collect supplementary data
that cannot be derived from the balance sheet.
One typical area where using statistical accounts can sometimes
simplify bookkeeping is tax law because in some countries,
tax laws and laws governing trade balances impose conflicting
requirements.
For example:
.Bl -dash
.It
To encourage investments, tax law sometimes allows special depreciations
that would be illegal if included on the balance sheet.
.It
To avoid double taxation, some tax laws only treat part of the revenue
from certain share funds as taxable revenue.
Of course, for the balance sheet, the full amount has to be booked as
revenue.
.It
To avoid long delays in tax payments, some tax laws treat certain
parts of unrealized profits as taxable revenue.
On the other hand, trade laws of the same countries may forbid
booking these revenues and increasing the values of the assets.
.El
.Pp
In contrast to many commercial accounting programs,
.Xr pta 1
does not attempt to guide the user to conform to the particular
bookkeeping or legal system of any country.
It is entirely the responsibility of the user to define and use
accounts as required by applicable law, and it is very easy
to set up the accounts file and use the accounts in ways that
are grossly illegal.
The flip side is great flexibility, allowing to easily adapt
.Xr pta 1
to many different legal systems.
.Sh SEE ALSO
.Xr pta 1 ,
.Xr pta-journal 5 ,
.Xr pta-glossary 7
.Sh AUTHORS
.An Ingo Schwarze Aq Mt schwarze@openbsd.org