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(author here) Thanks for raising this — I intended for that example just to illustrate the underlying concept of having balanced entries for a transaction, rath
by refrigerator 6y ago
(author here) Thanks for raising this — I intended for that example just to illustrate the underlying concept of having balanced entries for a transaction, rather than to show how double entry is practiced today.
The focus of the post is on the underlying concepts rather than the implementation details — I didn't want to introduce the whole thing about debiting assets vs debiting expenses etc because it's a little confusing for a lay person.
Hope that makes sense. I've added a caption to the image explaining this.
- abakker 6y agoI don't think this is a useful response. The concept of accounting is deeply integrated with the rules of accounting. The implementation details are the concepts, really. I'd suggest making the examples conform to the actuality of how accounting will get used.
- kqr 6y agoI agree. Basic pedagogy: if you are about to introduce an example where you think you might have to choose between being truthful or confusing, you should not introduce that example. Or, if you have to, do it the confusing way. Lying to beginners to shield them from confusion does not help them. Find a way to do what you want to do while still telling the truth.
- ricopags 6y agoDo you mean, if you have to, do it the truthful way?
- maks25 6y agoI still don't see the reason why you would do it the wrong way, and the caption only adds to the confusion. Why not just rewrite instead of adding a caption that doesn't make sense anyway.
- EvanAnderson 6y agoI have to echo others' sentiments, too. You should use examples that are harmonious to both the concept and implementation detail. Otherwise you're just creating the potential for confusion for no good end.
- joshuaheard 6y agoGreat article. Most people don't appreciate the value of accounting knowledge. One quibble: few businesses are actual corporations, so I learned to use the term "Owners' Equity" instead of "Shareholders' Equity".