Correction or confusion?
Ben Alexander
Am I right about this, or am I still confused...
In my copy of ledger.info, ledgers are explained in terms of a
checkbook ledger and uses the following example
9/29 BAL Pacific Bell $-200.00 $-200.00
Equity:Opening Balances $200.00
9/29 BAL Checking $100.00 $100.00
Equity:Opening Balances $-100.00
9/29 100 Pacific Bell $23.00 $223.00
Checking $-23.00 $77.00
I think there is a sign error here: the balance for the Pacific Bell
Account is -$200, but in the text it is stated as being $200.
I think the block I copied above is incorrect. The same error is
repeated when the example is translated to the ledger file format.
As a suggestion to improve an already great learning tool for the
accounting novice: When the manual suggests that "money never just
appears" and that there is never a balance in the ledger because "it's
always zero" there is an opportunity to add a one or two (long)
sentences to clarify. Here's my example
"For personal ledgers, when you're born, all accounts are at zero (one
hopes) and as you live:
1. Equity: Accounts accommodates previous years of not maintaining
accounts (fixed, probably negative)
2. Expense: Accounts (e.g. Expense:Pacific Bell) become more and more
positive (unavoidably)
3. Income: Accounts become more and more negative (on payday)
4. Assets: Accounts become more and more positive (in good times)
5. Liabilities: Accounts (like Liability:MasterCard) become more
positive (in good times, when you pay them off) and more negative
(when you use them to buy things).
"When you die, Equity: and Income: will stand at large negative
balances, Expense: and Assets: will stand at large positive balances
and Liabilities will have to be paid (out of Assets) before your heirs
get what's left."
If these sentences aren't correct then I'm confused... and I'd
appreciate any clarifying comments. Getting my money into a ledger is
my New Year's Resolution! Yeah 2009!
-Ben
John Wiegley
> In my copy of ledger.info, ledgers are explained in terms of a
> checkbook ledger and uses the following example
>
> 9/29 BAL Pacific Bell $-200.00 $-200.00
> Equity:Opening Balances $200.00
> 9/29 BAL Checking $100.00 $100.00
> Equity:Opening Balances $-100.00
> 9/29 100 Pacific Bell $23.00 $223.00
> Checking $-23.00 $77.00
>
> I think there is a sign error here: the balance for the Pacific Bell
> Account is -$200, but in the text it is stated as being $200.
You're right, that balance sheet is completely wrong.
> As a suggestion to improve an already great learning tool for the
> accounting novice: When the manual suggests that "money never just
> appears" and that there is never a balance in the ledger because "it's
> always zero" there is an opportunity to add a one or two (long)
> sentences to clarify. Here's my example
>
> "For personal ledgers, when you're born, all accounts are at zero (one
> hopes) and as you live:
> 1. Equity: Accounts accommodates previous years of not maintaining
> accounts (fixed, probably negative)
> 2. Expense: Accounts (e.g. Expense:Pacific Bell) become more and more
> positive (unavoidably)
> 3. Income: Accounts become more and more negative (on payday)
> 4. Assets: Accounts become more and more positive (in good times)
> 5. Liabilities: Accounts (like Liability:MasterCard) become more
> positive (in good times, when you pay them off) and more negative
> (when you use them to buy things).
Liabilities should never go positive, otherwise you've overpaid.
> "When you die, Equity: and Income: will stand at large negative
> balances, Expense: and Assets: will stand at large positive balances
> and Liabilities will have to be paid (out of Assets) before your heirs
> get what's left."
One can only hope that Assets will be large then. :)
> If these sentences aren't correct then I'm confused... and I'd
> appreciate any clarifying comments. Getting my money into a ledger is
> my New Year's Resolution! Yeah 2009!
Let us know how it goes!
John
Ben Alexander
On 2009-Jan-21, at 23:50, John Wiegley wrote:
>> 5. Liabilities: Accounts (like Liability:MasterCard) become more
>> positive (in good times, when you pay them off) and more negative
>> (when you use them to buy things).
>
> Liabilities should never go positive, otherwise you've overpaid.
>
Which sometimes happens to me, especially on corporate credit cards
that require me to pay the balance at the end of the month and the
company 'reimburses' me sending payment directly to the same card.
It's not fair, (nor common practice) but it does happen.
I used the phrase 'more positive' rather than 'smaller in absolute
value' because I thought it would be more clear. Feel free to tweak it.
-Ben
David Brown
> Which sometimes happens to me, especially on corporate credit cards that
> require me to pay the balance at the end of the month and the company
> 'reimburses' me sending payment directly to the same card. It's not fair,
> (nor common practice) but it does happen.
I suspect it's fairly common. My last trip, my company's payment
arrived on the due date. I was prepared to have them extract a
payment from checking, and then have to figure out how to get the
money back.
Their expense queue is processed stricly in order received, with
requests to prioritize due to deadlines completely ignored. Well, not
really ignored, more rudely denied.
David