Annotation of pta/pta-glossary.7, Revision 1.2
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1.2 ! schwarze 17: .Dd $Mdocdate: September 27 2020 $
1.1 schwarze 18: .Dt PTA-GLOSSARY 7
19: .Os
20: .Sh NAME
21: .Nm pta-glossary
1.2 ! schwarze 22: .Nd fundamental terms used for plain text accounting
1.1 schwarze 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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