Talk:Double-entry bookkeeping/Archive 2

What is needed to finish this article?

There are three problems with this article.

1. It is poorly written and difficult to understand. The introduction doesn't provide any link from the basics of business to the specific tasks of bookkeeping.

2. It seems to be oriented toward double-entry bookkeeping with traditional paper ledgers, which is not even used by small busnesses in developing countries. The article doesn't even mention computer-based book-keeping. I tried to add this but my changes were deleted.

Double Entry Bookkeeping is used in computerised systems. Understanding how it works is vital to a good bookkeepers and their understanding of what is going on with the accounts. Modern accounts software hides what is going on below the surface, but if you don't understand the mechanics of what is going on below you wont know if your accounts are correct. The information is provided for refernece and not as a training aid. NilssonDenver (talk) 00:04, 25 July 2009 (UTC)

3. It is oriented toward tasks and procedures while a better explanation of the concepts is needed, Obviously even a bookkeeper in Argentina using a pirated copy of Quickbooks to do accounts for a startup in a California garage (a real example) needs to know more about what different types of accounts represent and how to set them up. The article currently discusses things like the accounts being out of balance, trail balances, daybooks, etc. which is largely obsolete. With even the simplest bookkeeping system it isn't even possible to make an entry that is out of balance. —Preceding unsigned comment added by 74.237.226.142 (talk) 03:11, 22 July 2009 (UTC)

Compuerised acccounts software can go out of balance!. Trial Balances is still the most importnat report in any accounts system. All other reports are created from the trial balance. Daybooks are still used in accounts software, they may not be called that but usually all reports are daybooks with another name. NilssonDenver (talk) 00:04, 25 July 2009 (UTC)

This article has not changed much in a long time. Defining Double-Entry seems to be the most changed part of the article. I have now changed it again. Has anyone got a clearer definition that 'normal' people can understand? NilssonDenver (talk) 21:12, 3 April 2009 (UTC) I asked how we could finish this article. I am trying to make it easy to read. I can feel an heated discussion coming on. Quoting form a writer for the definition of Double-entry bookkeeping does not make it right. That book definition is not suitable here. I am sorry but I would like to make this an article that can be easily read by anyone and not only by those in the industry. I have spent time keeping this article easy to read and redrafted paragraphs many times based on input from many readers. Side bars only add to the confusion. NilssonDenver (talk) 22:07, 22 April 2009 (UTC)

Unless you are in the bookkeeping industry and are trained in bookkeeping skills, this article will be difficult to understand. But this applies to any article on nay topic. If it is not an area you understand, the information provided in wikipedia only provides a point of reference. There is wikibooks which is where greater detailed workings can be explained. NilssonDenver (talk) 00:04, 25 July 2009 (UTC)

How do you make something that is unexciting interesting. How will this article get into the main stream and get published on the front page if the majority of readers are not in the bookkeeping industry. Double-entry bookkeeping will never change. It has simple rules. Debit: assets and expenses and money in, Credit: gains, liabilities and money out. Double entry only applies to the Nominal (General) ledger. It does not apply to the daybooks! NilssonDenver (talk) 00:04, 25 July 2009 (UTC)

• It would help if somewhere in the article (the Introduction!?) there was an explanation of what double-entry bookkeeping *is*! Perhaps an example, too? 83.104.133.97 (talk) —Preceding undated comment added 17:00, 6 March 2010 (UTC).

• I agree. Straight after the introductory paragraph I'd like to read a simple account of the concept of double-entry bookkeeping - this was a key development in technology/knowledge, and it can't be that difficult to outline it. It needs a simple example, with numbers, laid out in a table, showing two sets of accounts, and how the balance is arrived at (zero in case of no error, non-zero in case of error). Maybe the table can be set out twice, once with a deliberately introduced error, showing how the error results in a lack of balance and therefore detection of the error. The rest of the article is a muddle: a logical flow would tell how the development revolutionised industry, how it is used today in computerised systems, if it is, and whether there are more sophisticated systems today that owe their origins to this 13th century development. Sangwine (talk) 20:17, 6 March 2010 (UTC)

Medici bank

How can Giovanni di Bicci de Medici have introduced double-accounting in the 13th century to the Medici bank, when he was born in the second half of the 14th century and founded the Medici bank when the 14th century had almost gone by, in 1397? —Preceding unsigned comment added by 129.70.96.241 (talk) 09:23, 21 November 2008 (UTC)

Islamic banking history?

The Islamic banking page suggests that the early Islamic banking system introduced some innovative elements including double-entry bookkeeping. However, this page does not refer to that, and instead mentions only the later? Medieval Italian origins. Is it possible that one influenced the other, just like the Arabic numbering system? I don't know the answer, so please if anyone can find out, it would be good to resolve it. —Preceding unsigned comment added by 70.127.124.69 (talk) 18:55, 22 March 2008 (UTC)

The claim about double-entry innovations in the Muslim world and their influence on Italian double-entry was advanced by Zaid in “Were Islamic Records Precursors to Accounting Books Based on the Italian Method?” Accounting Historians Journal, Vol. 27, No. 1, pp. 73-90. This paper was challenged by Nobes in “Were Islamic Records Precursors to Accounting Books Based on the Italian Method? A Comment”, Accounting Historians Journal, Vol. 28, No. 2, pp. 207-214. There isn't any convincing archival evidence for Zaid's claims, so the reference in Islamic banking probably needs to be corrected.Mtalib622 (talk) 16:20, 11 June 2008 (UTC)

Explanation?

Suggestion: anyone care to explain the meaning of: A/c, a/c, b/f, and c/f in the Article? It might be interesting not only for non-natives in English... Thx. —The preceding unsigned comment was added by 62.178.77.228 (talk) 08:47, 11 April 2007 (UTC).

Using template

I recognize that user NilssonDenver prefers not to use the template above, but does anyone else feel that templates should be included to unify the articles within the area of accounting? The content of the template could be improved to meet the consensus of users, if necessary...--Dpr 16:57, 12 April 2007 (UTC)

Classification Of Accounts

(a.)According to Modern approach Accounts are classified into five groups: 1.)Asset 2.)Expense 3.)Revenue 4.)Liability 5.)Capital

(b.)According to Traditional approach Accounts are classified into three groups: 1.)Real : all the assets except Debtors 2.)Nominal : all the expenses , incomes , losses, gains. 3.)Personal : all the accounts of persons, company or firms. these are further classified into three types i.)Natural: all the accounts of persons. E.g. debtors, Creditors ii.)Artificial: all the accounts of a company, a firm,or any other business organization. E.g. Bank, Sharma Traders etc. iii.)Representative: all the expense O/S or prepaid, revenue in advance or accrued.

Where is this information coming from? Are there some reference documents available? NilssonDenver 15:06, 1 September 2007 (UTC)

I deleted most of this as I don't recognise it and it is unsourced. I have retained the 5 elements and referenced it to the IASB framework. AnthonyUK 14:54, 4 November 2007 (UTC)

Need Explanation of "have a normal balance of debit/credit"

I think the following passage needs to be prepared by a further explanation: "Assets, Expenses, and Drawings accounts (on the left side of the equation) have a normal balance of debit. Liability, Revenue, and Capital accounts (on the right side of the equation) have a normal balance of credit."

The problem is that "debit" is ordinarily thought to mean "subtracting something," while "credit" is thought to mean "adding something." The expressions "have a normal balance of debit" and "have a normal balance of credit" in the above passage are just unintelligible against this background.

Could someone please insert an explanation of what is meant by these expressions? —Preceding unsigned comment added by 146.74.1.99 (talk) 00:32, 12 September 2007 (UTC)

The problem is that "debit" is ordinarily thought to mean "subtracting something," while "credit" is thought to mean "adding something." The expressions "have a normal balance of debit" and "have a normal balance of credit" in the above passage are just unintelligible against this background.

Explanation of "have a normal balance of debit/credit"

A very simple explanation of the words debit and credit in a acccounting environment. The words are nothing more the labels identifying which side to record the amounts with. I learned that in accounting 101 class. —Preceding unsigned comment added by 75.68.51.240 (talk) 22:17, 17 February 2008 (UTC)

This is a common misconception in bookkeeping. There are no negatives or positives in bookkeeping, only debits and credits. Computerised accounts software requires pluses and minuses to do calculations. In this case Debits are normally treated as "positive" amounts and Credits as "negative" amounts which seems counter intuitive as Sales are income and income is usually treated as a positive. When you look in the General (nominal) Ledger you may see Sales amounts recorded as negative values (credit) and expense amounts recorded as positives (debit). But they may also be reveres with Sales as Positive and expenses as negatives. Correctly they should be shown as Debit (Dr) or Credit (Cr) amounts. The balance on an account is said to have a debit (DR) or credit (CR) balance and not a plus (positive) or minus (negative) balance.

In Bookkeeping these are the rules: Debit = Asset and Expenses (and money in to the bank account) Credit = Gains (Sales) and Liabilities (and money out of the bank account) These are the rules and you must know them. You must know also know terms used such as what an Asset is and what a Liabilty is.

It is like learning another langauge. For example, there are grammar rules in each language that don't seem logical to someone who has english as a first language. The United Nations in English is "United Nations" and in French it is "Nations Unies" (Nations United). Why is it not Unies Nations? Because that is the way that language is constructed. Other languages use prefixes before words to indicate the word as being "male", "female" or "neutral". Why, because that's the rules and if you don't use the rules you wont be understood! By the way English is one of the most complicated languages when it comes to rules. If a letter starts with a vowel (a,e,i,o,u) you use "an" such as "an apple" and not "a apple", explain that to someone learning english :-) Bookkeeping and accounting have "grammar" rules you just have to learn.

As to why Assets and Expense are Debits and Gains and Liabilities are Credits, that was decided by someone long ago and everyone in the world now uses those rules. He just decided thats they way to go and now we are stuck with it. It's like why is the colour red called red, because that was what was decided by someone way back in history! NilssonDenver 10:08, 5 October 2007 (UTC)

Yep, these accounting terms confused me for years until I read the article today. I still was uncomfortable though, so for my own mind's ease I have invented replacement words for debit and credit as far as accounting is concerned. I just mentally replace them with words that derive from the words left and right (lebbit and reggit) so that when reading, I immediately think of left and right and try to pay no mind to the other familiar usages of the words debit and credit, which always mislead me in accounting usage. Because that's all that is meant to be implied: affiliation with left or right side of the accounting equation (Assets + Expenses + Drawings = Liabilities + Revenue + Capital). It's the accounting equation arrangement that determined what we call left or right. Nicknicknickandnick 08:03, 29 October 2007 (UTC)

Origin of double-entry

I deleted the following paragraph from the article:

Double entry bookkeeping method was discovered in 1458 by Dubrovnik citizen Benedikt Kotruljevic (Dubrovnik 1416 - Aquila 1469), not Luca Pacioli. Manuscripts of his "The Book on the Art of Trading" were published after he died, in 1573.

This is a very strong claim, and if you want to rewrite the history of double entry bookkeeping, you're going to need to provide a source. I'd also point out that if the manuscript wasn't published until 1573 you can't possibly know whether it had been written before or after Pacioli. AnthonyUK (talk) 18:41, 7 December 2007 (UTC)

Dear AntkonyUK

It is true that first codification of double-book-keeping system (as far as present world knowledge can tell) was done by Dubrovnik's merchant Benedikt Kotruljevic, some 50 years before Paccioli did it. The bare fact that Benedikt died some 30 years before Luka published his book tells enough about who was the first. I think, on the contrary, that the claim that Paccioli was the first one is too strong and not taking into consideration the book written by Benedikt. There are numerous sources about it. Beware that the fact of officily publishing the book does not mean invention, codification, being the first in writing but only means publication and description. There has to be proven that Paccioli invented (or codified) the system (obviously not). The term "father of modern bookkeeping" is also subject to a debate. For example, Yale University states the name of Benedikt as the "father" (see the link) http://www.library.yale.edu/slavic/croatia/science/

Here are some links saying benedeto was the first one http://home.kpn.nl/annejvanderhelm/cotrugli.html http://www.croatians.com/INVENT-BOOKKEEPING%20KOTRULJEVIC.html http://www.answersroom.com/1-6/2247-Project-Management.html

I am sure that there is at least as much books saying that Luca was first, but this is not the criterion. Wikipedia, in order to be objective, must rely on proven facts or significant number of indications and not on the number of publishings, especially if there is a conflict between two national (Italian and Croatian) intellectual sources with one being around 10 times bigger.

I must protest for your action of deleting the paragraph. You CAN possibly know that it was written before (if nothing then year of Benedikt's death is firm, unless dead people can write books because someone doesn't like the fact that the book was originally writen in 1458)

I am open for any further discussionHammer of Habsburg (talk) 02:21, 19 February 2010 (UTC)

Examples of debits and credits

I don't know enough about the subject to change anything (hence why I'm reading it) but are the two tables under "Examples of debits and credits" duplicates? —Preceding unsigned comment added by 81.152.181.95 (talk) 21:10, 13 January 2008 (UTC)

Well spotted :-)

I think someone must have made the table easier to read and forgot to remove the old one. I'll delete the top one as it isn't as clear I think. AnthonyUK (talk) 22:06, 13 January 2008 (UTC)

Photo request

It would be nifty to actually see the "T" in a ledger as described. -- Beland (talk) 22:37, 1 May 2008 (UTC)

Useful article

I think this article is a useful summary of the subject. There are lots of articles out on the internet that try to explain accounting but it is good to have a summary of everything in one place. m.e. (talk) 04:49, 14 December 2008 (UTC)

Example transaction of stationery purchase

The article currently contains an incorrect example, that:

An example of an entry being recorded twice i.e. double entered (ignore any purchases taxes such as GST,VAT etc.) is when, let's say on 1st January, a supplier's invoice for stationery costing €100 is recorded and analysed. The expense or Debit entry is Stationery Nominal Ledger a/c €100 Dr and the Credit entry is to the Supplier's Control Nominal Ledger a/c €100 Cr. This transaction has now been recorded twice in the financial accounting system and the total value is €100 for both Debit and Credit values.

That is entering the transaction of purchasing stationery as if the stationery is a significant asset, while in fact that account name would probably not appear in the Chart of Accounts of any real business (besides, perhaps, a stationery store). That transaction would instead be recorded as a dr. to administrative or some other expense, and a cr. to cash or to accounts payable. It's a poor example because purchasing its own stationery is not the central activity of any business. I suggest using the purchase of inventory for a merchandising company, instead. doncram (talk) 10:34, 2 May 2009 (UTC)

Stationery is an expense people can relate to. It can be an asset as well as an expense. It can be an asset in a business that does not sell stationery as you can have a stock of stationery. If my small businesses stationery is a significant expense and itemising it separately is good expense management. The statement "That is entering the transaction of purchasing stationery as if the stationery is a significant asset" is there some principle involved here, some general rule of bookkeeping and accounting practice. Usually when businesses set up a chart of accounts I have never heard anyone mention "significance". Usually working on what is relevant to the business in terms of what expenses need to be analysed or grouped together e.g printing & stationery would be of more use. But with all things in the bookkeeping/accounting world we all have our preferences for how things get done. I have never come across the term "significant asset" and would like more information. In particular there is a stub article on chart of accounts which is where a detailed explanation of this aspect would fit perfectly. Also if you want to change the text from "stationery" to something else, a detailed reason for your action here in the discussion pages explaining why would generally not be objected to by anyone. But please explain it in plain english rather than just stating accounting terms not everyone would be familiar with. I do not disagree with your argument, but my background is working with small businesses and stationery is one of those expenses that can just explode and be missed if it is analysed separately and people can relate to. NilssonDenver (talk) 21:18, 5 May 2009 (UTC)

Reverted Intro Section

I reverted the introduction section to the last version by NilssonDenver because the recent edits made the article very difficult to read. I appreciate the efforts of the contributors, but you completely lacked sourcing on your edits. I also think the tone was wrong for an encyclopedia. Finally, the intro section is already overly large. CarbonX (talk) 22:26, 16 July 2009 (UTC)

Correct me if I'm wrong, but it's my impression that Wikipedia is a reference for and by everyone; no one individual is the sole editor of an article. I added the changes in the introduction because my daughter, who is living an Argentina, had gotten a job doing bookkeeping for a small company. She looked at this article for some ideas on how to get started and found the article as a whole almost unreadable and completely irrelevant to what she actually had to do. It seems to have been updated less than three years ago, but there is not even a mention of computer-based book-keeping, even though it is virtually universal. The tasks one has to do as a bookkeeper are simply different today than when this article was written; much of it seems to be devoted to explaining how to do on paper what any ledger does automatically today. while there is no discussion of how to set up accounts and resolve many of the problems commonly encountered in bookkeeping for a small business. Most people reading this article are not historians, academicians, or lawyers for a major corporation. They want to know why the job is needed and how to do it.

Rather than just trashing my work, you might consider putting my intro and yours in this section and letting people comment on which is more informative, readable, and accurate. As for references, as far as I can tell there are currently none in the entire introduction, none of the terms are defined, and there are serious inaccuracies, most obviously the suggestion that the double entry system by itself ensures accuracy; obviously there are many types of errors that can still be introduced.

Regards, danw@siri.org Danwoodard (talk) 06:06, 22 July 2009 (UTC)

Try not to take my edits personally. I am not the "sole editor" of this article, in fact I've only ever made the one edit to it. I ran across this article and found the introductory section of the article to be very difficult to read. If you look at my edit summary [1], you'll see that I said "restoring intro section to last edit by NilssonDenver, with apologies". I know that you obviously put a lot effort into your contributions, but it didn't seem that fit in with the spirit of wikipedia.

My main concern relates to WP:CITE. "Material challenged or likely to be challenged, and all quotations, must be attributed to a reliable, published source." I'd also point out that just because the article is not well referenced currently doesn't mean we should continue to add unreferenced materials.

Secondly, the section was growing overly large, as per WP:LEAD. Intro sections should be concise and not overly large. Generally 4 paragraphs at most.

I have no problem with you adding that information back into the article in ways that address the points that I made. I appreciate your contributions and hope you continue. Cheers! CarbonX (talk) 08:05, 22 July 2009 (UTC)

Dates and enumeration of Profit and Loss Statement and Balance Statement appear incorrect.

To the Author(s) of the article....

It looks as if the Profit and Loss Statement, and the subsequent Balance Sheet immediately following the Trial Balance in "Example 1" are incorrect.

All transactions taking place in "Example 1" are specific to July 2006, up to and including the Trial Balance.

After that, the "Profit and loss statement" indicates that it is relative to "31 July 2007", and the amounts therein are given in multiples of 100 as opposed to the original amounts given in "Example 1".

The same with the "Balance sheet" for "Example 1".....the "as at" date is shown as "31 July 2007" and the amounts shown are in multiples of 100 as opposed to the original amounts of "Example 1".

This was noticed by me at 9.26PM, U.S. EST, on 20 September 2009.

Thanks for your time.

Jmaxg (talk) 01:28, 21 September 2009 (UTC)

Reverting various changes

I agree with the comments that e.g. the true economic value of an asset is the discounted value of future cashflows from it - however they are totally out of place in this article, which is supposed to explain how double-entry bookkeping works, not the values to be placed on assets. The other changes made on 22 November are similarly unhelpful. Please do not change this back again without further discussion. -Ehrenkater (talk) 14:55, 25 November 2009 (UTC)

The Mythical Golden Rules of Accounting

Some consensus need to be formed regarding whether the much vaunted "Golden Rules of Accounting" exist or not as the preponderance of the desire to deny their existence seem particularly prevalent on wikipedia. --YH1975 (talk) 19:34, 12 December 2009 (UTC)

These rules do exist, and do have a place in the article, set in an appropriate context, which is why I left them in when I reverted various other stuff by the same contributor which clearly had no place in the article. Ehrenkater (talk) 15:55, 12 December 2009 (UTC)

If a consensus does exist regarding the existence of the "Golden Rules of Accounting" as I am led to believe then their significance would automatically purport the need to be place them somewhere in the article though they may do so presently in an inappropriate context and not their automatic deletion until the penultimate omniscience of some obscure contributor finds the appropriate context for their perfect placement. Knowledge, unfortunately does not conform to the stringency of appropriate of time and place and just is albeit sometimes out of context. Wikipedia should have a anti-deletionist policy "If it ain't shit, don't fix it" --YH1975 (talk) 19:34, 12 December 2009 (UTC)

Certainly they exist. Possibly you could add the section without cutting and pasting someone else's work. Possibly you could use a reliable source. It's not asking much. Kuru ^talk 22:52, 12 December 2009 (UTC)

The Golden Rules of Accounting which were unfortunately indigenously sourced (available in any elementary accounting textbook off the shelf) were deleted in favour of new improved table with the shiny green and red arrows with the gleeful delight of a bunch of eight year old kids discovering a shiny marble in the attic as is evidenced by the juvenile exchange reproduced below. However, as wikipedia recognises the innocuous edits of inane users as fledgling attempts of future administrators this vandalism proceeded unreconciled under the tacit approbation of current upholders of moral uprightness. --YH1975 (talk) 00:14, 13 December 2009 (UTC)

Examples of debits and credits I don't know enough about the subject to change anything (hence why I'm reading it) but are the two tables under "Examples of debits and credits" duplicates? —Preceding unsigned comment added by 81.152.181.95 (talk) 21:10, 13 January 2008 (UTC) Well spotted :-) I think someone must have made the table easier to read and forgot to remove the old one. I'll delete the top one as it isn't as clear I think. AnthonyUK (talk) 22:06, 13 January 2008 (UTC)

I'm sorry, but I really can't help you; I don't respond to dialog which includes personal attacks on other editors. Please read WP:CIVIL when you get an opportunity. Thanks. Kuru ^talk 17:29, 13 December 2009 (UTC)

I respectfully disagree with your opinion stated above that you couldn't help me, you can definately be of substantial help if you would contribute by adding the "Golden Rules of Accounting" with appropriate sources and state them in the appropriate context and thus act on what you seem to agree in principle. As regards the sarcasm in my description of other wikipedians (why would anyone sensible would want to identify himself as such seems beyond me) it can be best defended as a lame attempt at humour in this holier than thou milieu. --YH1975 (talk) 19:24, 13 December 2009 (UTC)

Subversive Vandalism

The mini-contributors (the ones who get the micro-euphoric feeling of 'Yeah! I contributed to the article') innocuously edit miniscule bits of information thus avoiding being noticed but at the same time inserting inconsistencies in the information to create lack of consistency and flow in the overall article thus leaving the Wikipedia article simply a babble of cluttered perceptions of humanity (or overzealous contributors) and not the clear vision of a few enlightened souls (do I sense an elitist fragrance here).

These edits being specifically hidden in the backwaters of the article are ignored in the glorious battle against the major vandals (ones who probably do not have the intellectual breadth to realise that their efforts to vandalise are noticed) while the article dies the death of a million edits by the honest, zealous ants oops mini-contributors who probably have the hearts in the right place but not necessarily their logical perspective.

Another vandalism is forcing templates on knowledge (mini-burgers of easy readibility) obviously under the objective of simplification for popular consumption. However, these forced templates break knowledge into parts which being separated from the whole are logically meaningful but never give the complete picture. The complete understanding of the topic can be understood only after reconciling contradictory and distinctive information regarding a subject to gain your own unique perspective and not simply by being a "consensus sheep".

The point being you can't understand any subject or thing by reading a consensus view on a subject but gains snippets of information regarding the topic which probably isn't knowledge (you actually need to read and research different sources of information to gain a distinct but clearer perspective) but which is probably not a very encouraging thought to promote since it would promote anarchy within the system. --YH1975 (talk) 19:33, 12 December 2009 (UTC)

Quick question: does this have anything to do with this article? If you have a proposal, please feel free to articulate it here; if you'd like to do a significant revision to the article, it would be a good idea for you to create a version in your userspace to work on instead of experimenting on the actual article. If you need help, asking for it may be a good idea. Kuru ^talk 22:58, 12 December 2009 (UTC)

Yes, it definitely relates to the article - Objective 1: to convince people not to force a consensus view of accounting and the double entry book keeping system but review existing models for understanding finance through the basics of book keeping Objective 2: to remove the preponderance of fiction perpetrated through new and diverse terminology hammered out by removing it at the root i.e. removing the fiction of debits and credits. Example: Debtors become Accounts Receivable on the other side of the Pacific. Selling your debts to someone else becomes securitisation of debts.

An incongrous trend has been particularly preponderant i.e. deletionists and discussionists are active more in editing and deleting the article rather than contributing to it. --YH1975 (talk) 00:30, 13 December 2009 (UTC)

A Brief History of Double Entry Book-keeping

A new 10-part series "A Brief History of Double Entry Book-keeping" starting on Monday, 8th of March 2010 at 15:45 GMT on BBC Radio 4[2]. --Gavin Collins (talk|contribs) 12:26, 3 March 2010 (UTC)

No longer available from the BBC regrettably, but the first five episodes appear to be available here http://www.lse.ac.uk/accounting/news/Accounting%20History.aspx 92.29.118.69 (talk) 11:53, 10 June 2014 (UTC)

What happened to Double Entry?

There appears to be a lot of content NOT about double-entry bookkeeping in this article. As one person noted, death by many minor changes and also larger changes. It's a growing article, but explain Double-entry bookkeeping to me, where is the explanation? NilssonDenver (talk) 22:39, 28 May 2010 (UTC)

I too, cannot figure out from this article what double-entry accounting is? And the only examples are multiple pages long. How about a simple summary/explanation, and a short example? Also, is it fair or not to think that double entry is accounting is obsolete now that we have spreadsheets (or perhaps would it relate to the journaling/semaphoring systems used behind the scenes for modern electronic bank transfers)? Cesiumfrog (talk) 07:43, 29 May 2010 (UTC)

A spreadsheet is a general-purpose tool. That's rather like saying, "Isn't double-entry accounting obsolete now that we have computers?" A spreadsheet could be used to implement a simple single-entry system, but a double-entry system would be unwieldly. Also, systems based on spreadsheets tend to be fragile. Better to use an application specifically designed for the purpose, like GnuCash.Kbk (talk) 15:56, 19 October 2010 (UTC)

TYPES OF ACCOUNT

TYPES OF ACCOUNT

Income Revenue from sales of goods and services to your company's customers.

Other income Revenues coming into your company that do not relate directly to the main purpose of your company (for example, interest income).

Expense Expenses that your company is using to operate the business. For example, operating expenses include wages, rent, supplies, advertising, or utilities.

Other expense Expenses that do not relate to the normal course of your company's business (for example, interest payments on long‐term debt).

Cost of goods sold Cost of goods, materials, or services that are directly related to the generation of your company's sales revenues.

Cash Cash items, such as petty cash or deposited funds.

Bank Accounts that are considered liquid or easily convertible to cash (for example, bank accounts, short‐term investments, and some securities).

Other current asset Assets other than liquid assets that have a life of less than one year (for example, accounts receivables and inventory). Note: Even though accounts receivable is a current asset, you do not have to set up accounts receivable in Other current assets. When you create a company, Microsoft Office Accounting 2008 creates a system account named Accounts Receivable, which is categorized as an Accounts Receivable account type.

Inventory asset Value of goods on hand at a specific time. Inventory assets are purchased or manufactured to sell to your customers. Other asset Assets of a minor type that are classified outside of the current or fixed asset categories. They can include investments or intangible assets, such as goodwill or patents. Fixed asset Equipment, property, or plant assets that are purchased to use in your company rather than for resale. Fixed assets can be depreciated over various lengths of time depending on their type. Your company can absorb the expense over a period of time.

Credit Card/Line of Credit Current obligations to a financial institution that are created by using your credit card or line of credit for purchases or expenses.

Payroll liability Tax obligations that the company owes to federal and state tax agencies as a result of running payroll.

Current liability Obligations due within one year or the normal operating cycle of your business. Accounts payable, short‐term notes, accrued liabilities, and tax accruals are examples of this type of account. Note: Even though accounts payable is a current liability, you do not have to set up accounts payable in Current liabilities. When you create a company, Office Accounting 2008 creates a system account named Accounts Payable, which is categorized as an Accounts Payable account type. Long‐term liability Obligations of greater than one year or the normal operating cycle of your business. Mortgages, long‐term notes, or non‐current portions of customer warranties are examples of this type of account.

Equity An account to record the difference between assets and liabilities. This category is also known as net worth, shareholders' equity, or net assets on company balance sheets. Another account of this type is Retained Earnings, which records the cumulative amount of net income left in the company.

By Sabbir Ahmed — Preceding unsigned comment added by Sabbirahmed (talk • contribs) 15:21, 16 March 2011 (UTC)

It is a commerce line by Aamir the gr8 — Preceding unsigned comment added by 117.201.52.238 (talk) 10:46, 7 September 2011 (UTC)