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Quickbooks uses double entry accounting at its core but hides it as single entry accounting (like Quicken) by presenting most UI as entries into registers that

Quickbooks uses double entry accounting at its core but hides it as single entry accounting (like Quicken) by presenting most UI as entries into registers that represent assets (like the checkbox register or invoices) or liabilities (like bills or credit cards) while hiding owner's equity behind a year-end closing dialog. For example instead of having to learn what accounts to debit and credit when invoicing and then receiving payment from a customer you enter invoices in the invoice UI and receive payments in the receive payments and it takes care of the debits and credits for you. You can use Quickbooks to directly do double entry accounting by entering company journal entries. You (or your bookkeeper/accountant) will do that for more complex transactions that don't have a dedicated UI like, for example, partially returning a damage deposit to a tenant with the remainder covering repairs needed. I took a community college course in Accounting when I was thinking about enrolling in an MBA back in the '90s. You can learn the math in a really short amount of time - it is just basic addition/subtraction. It does take a while to get an intuitive feel as to why some things are debit normal and some are credit normal. Doing a bunch of "T" accounts will bake it into your brain. There are some good graphics here about that (first site I found while Googling) - https://corporatefinanceinstitute.com/resources/knowledge/accounting/t-accounts/ https://corporatefinanceinstitute.com/resources/knowledge/ac...

mindslight 5y ago
So these "T accounts" are exactly the kind of thing I'm talking about. Reading that page they just seem to be a visual method to represent negative numbers, explained very verbosely? This seems like it might have been a really valuable invention for someone in 1494 or even 1894. But in 2021 when we're comfortable with defining rich semantic models, it just seems quaint and limiting. Like for instance as shown it leaves out the date, whether the transaction has tax relevance, a link to its corresponding second entry, etc. I know this is apostasy, but even "double entry" itself feels this way to me, compared with say more freeform "tags". Like if you pay an expense for repairs, which may be tax deductible, then it seems the only way to represent that expense in strict double book is to have 2 accounts for (Repairs_Tax, Repairs_Notax). And it gets even worse when federal and state tax differ, or multiple states are involved. Whereas what I really want is for that single transaction to possibly show up in multiple expense categories, which are then later summed for specific reports. Maybe my questions parallel the Lisp curse where arithmetic has gotten so easy I'm brushing off what I perceive to be overdiligent focus on shared mechanics? I just don't see what the traditional framework gets me, compared to how much people focus on it.
- jltsiren 5y ago
  I learned accounting as a CS student and did it for a few years for volunteer organizations that were too small to consider professional services. The order I learned things was probably very different from how accounting is taught in schools, but it was appropriate for someone with my background. From my point of view: Elementary accounting is just a simple formal system. If you are used to formal reasoning, you can learn it in a few hours. Basic accounting is all about the way of thinking. You learn the data model implied by the system and the key concepts behind it. You learn about things you are supposed to model within the system and how to accomplish that. And you learn about reporting, because nobody wants to see your low-level data. They want various views to the data based on richer data models. The accounts used in reporting are rarely the same as the ones used in accounting. Intermediate accounting is about applying those basic principles in a specific regulatory environment. A lot of confusion about accounting arises when people try to jump directly from the elementary model to the specific requirements without first understanding what they are trying to accomplish and why.
- PopAlongKid 5y ago
  >whether the transaction has tax relevance, It is almost always a matter of the account having tax relevance, not each individual transaction that involves that account. > the only way to represent that expense in strict double book is to have 2 accounts for (Repairs_Tax, Repairs_Notax) There are very few accounts that need to be split like that for tax purposes. Meals & entertainment are one such (although the tax laws about that change from year to year sometimes), and maybe the part of dues to a professional organization that are for political lobbying purposes. It's really not a problem at least in the U.S. tax code. And note, as I previously commented, it is quite common for a business to have at minimum two sets of books, one for tax and one for book (the company's own internal representation of its financial position). >[T-accounts] just seem to be a visual method to represent negative numbers T-accounts are an instructional tool, they are not used for actual production accounting purposes. And they don't represent negative numbers, they illustrate a journal entry's effect on the general ledger accounts. Therefore, there is no need to include a date attribute. Rest assured, in a real double-entry system, every single debit and credit is date-stamped.

mindslight 5y ago

So these "T accounts" are exactly the kind of thing I'm talking about. Reading that page they just seem to be a visual method to represent negative numbers, explained very verbosely? This seems like it might have been a really valuable invention for someone in 1494 or even 1894. But in 2021 when we're comfortable with defining rich semantic models, it just seems quaint and limiting. Like for instance as shown it leaves out the date, whether the transaction has tax relevance, a link to its corresponding second entry, etc. I know this is apostasy, but even "double entry" itself feels this way to me, compared with say more freeform "tags". Like if you pay an expense for repairs, which may be tax deductible, then it seems the only way to represent that expense in strict double book is to have 2 accounts for (Repairs_Tax, Repairs_Notax). And it gets even worse when federal and state tax differ, or multiple states are involved. Whereas what I really want is for that single transaction to possibly show up in multiple expense categories, which are then later summed for specific reports. Maybe my questions parallel the Lisp curse where arithmetic has gotten so easy I'm brushing off what I perceive to be overdiligent focus on shared mechanics? I just don't see what the traditional framework gets me, compared to how much people focus on it.

jltsiren 5y ago
I learned accounting as a CS student and did it for a few years for volunteer organizations that were too small to consider professional services. The order I learned things was probably very different from how accounting is taught in schools, but it was appropriate for someone with my background. From my point of view: Elementary accounting is just a simple formal system. If you are used to formal reasoning, you can learn it in a few hours. Basic accounting is all about the way of thinking. You learn the data model implied by the system and the key concepts behind it. You learn about things you are supposed to model within the system and how to accomplish that. And you learn about reporting, because nobody wants to see your low-level data. They want various views to the data based on richer data models. The accounts used in reporting are rarely the same as the ones used in accounting. Intermediate accounting is about applying those basic principles in a specific regulatory environment. A lot of confusion about accounting arises when people try to jump directly from the elementary model to the specific requirements without first understanding what they are trying to accomplish and why.
PopAlongKid 5y ago
>whether the transaction has tax relevance, It is almost always a matter of the account having tax relevance, not each individual transaction that involves that account. > the only way to represent that expense in strict double book is to have 2 accounts for (Repairs_Tax, Repairs_Notax) There are very few accounts that need to be split like that for tax purposes. Meals & entertainment are one such (although the tax laws about that change from year to year sometimes), and maybe the part of dues to a professional organization that are for political lobbying purposes. It's really not a problem at least in the U.S. tax code. And note, as I previously commented, it is quite common for a business to have at minimum two sets of books, one for tax and one for book (the company's own internal representation of its financial position). >[T-accounts] just seem to be a visual method to represent negative numbers T-accounts are an instructional tool, they are not used for actual production accounting purposes. And they don't represent negative numbers, they illustrate a journal entry's effect on the general ledger accounts. Therefore, there is no need to include a date attribute. Rest assured, in a real double-entry system, every single debit and credit is date-stamped.