diff --git a/.nojekyll b/.nojekyll new file mode 100644 index 00000000..e69de29b diff --git a/404.html b/404.html new file mode 100644 index 00000000..b6352a4e --- /dev/null +++ b/404.html @@ -0,0 +1,549 @@ + + + +
+ + + + + + + + + + + + + + +abacus
started as a project to demonstrate principles of double-entry accounting
+through Python code, in spirit of build-your-own-x.
You can use abacus
to teach basics of accounting and accounting information systems (AIS),
+or as a project in your Python class.
abacus
as a software component with other open source tools such as medici
ledger.People seem to like the idea of a small library that can demonstrate +how accounting system works. Below are some quotes from +reddit discussions and other feedback that I found inspiring.
+++ + + + + + + + + + + + + +I think it's a great idea to mock-up a mini GL ERP to really get a foundational understanding of how the accounting in ERP works!
+I teach accounting information systems... I'd be tempted to use abacus as a way of simply showing the structure of a simple AIS.
+Hey, what a cool job, thanks much. Do you plan to make a possibility for RAS accounting?
+
abacus
).Ledger
, hledger
and beancount
are leaders in plain text accountingdouble-entry-accounting
tag on Github
+ is an extra clue for open source accounting information.Chart of accounts is a list of accounts to be used by a company. +Chart of accounts may be defined by the government (as in Europe) +or can be specified by the company itself according to guidelines (as in the US). +Fiscal rules and reporting requirements also affect composition of a chart of accounts.
+Charts of accounts are rarely published in an open, structured and machine-readable format. +They usually exist as a published legal document, a PDF file, sometimes an Excel file, +or may be deeply embedded in accounting software, either open source (like Odoo) +or proprietary (Oracle, SAP, NetSuite, Xero or QuickBooks). +Odoo in specific has a list of country localisations.
+A few country charts are listed below:
+There are also textbook charts and sample charts like DunderMifflin Paper Company fun chart.
+abacus
allows to create and maintain charts of accounts as JSON files.
+After a chart is specified, one can proceed to open ledger, posting entries
+and create financial reports.
The abacus
user is expected to have some task in mind that is solvable using Python code or scripts. But if you are totally new to the accounting area subject? Here is an introductory guide accounting, broken into several steps.
A firm is an entity that is legally separate from shareholders. The shareholders risk
+ loosing their investment into the firm if things go bad, but are not liable for any losses beyond that amount that may arise from firm operations.
The shareholders, creditors, trading partners and other parties want to know if + the firm is profitable and if it can meet obligations to repay its debt. + To satisfy these interesets the firm discloses financial information.
+A firm keeps records of the resources that the firm owns (assets) and sources of funds —
+ shareholder equity (or capital) and liabilities (debt). This is a firm financial position,
+ or balance sheet view of the firm.
A firm also keeps records of income and expenses that indicate does the firm make a profit or make a loss. This is income statement view of the firm.
+Balance sheet and income statement are derived from the same data linked together in an + accounting equation as explained below.
+Capital and liabilities indicate who has claims on the firm. A claim shows where the money came + from and where the money should be distributed if the firm is liquidated. Claims also have order of precedence in a firm liquidation.
+Capital, or equity, are funds provided by firm owners. The shareholders expect the firm will make + a profit by allocating these funds at the best of their interest and distribute all or part of this profit back to shareholders as dividend. The profit not distributed remains with the firm as 'retained earnings'.
+Liabilities are financial obligations of the firm. These are the records of what the firm owes + to other parties. When a firm takes a loan for a bank it is reflected as a liability. Also when some payment is due but not yet fulfilled this amount is also reflected as a firm's liability (for example, interest payment on a loan that is die. but was not mede yet). Liabilities are classified based on duration as current liabilities (due within a year) and long term liabilities (due at time beyond one year).
+Assets is everything that is owned by the firm itself and what can be converted into cash. Assets + are classified into fixed, or non-current, assets (like property, plant, and equipment) and current assets (like cash and inventory).
+Assets = Capital + Liabilities
¶An accounting identity Assets = Equity + Liabilities
is a statement that says the sources of funds are equal to the uses of funds. This is a published form of balance sheet statement at the end of an accounting period (a quarter or a year).
Profit of the firm is revenue (or sales, or income) less expenses associated with this revenue:
+Profit = Income - Expenses
. The report containing this data is income statement.
In accounting equation profit is recorded on the right side where capital and liabilities side. + Why so? Profit is an increment of capital invested into the firm, so it appears next to equity. When no dividends are paid, all of the current profit will add up to retained earnings, which is a component of equity. When the firm incurs a loss, this loss will diminish the firm capital.
+In Assets = Equity + Liabilities
representation the current period profit was already
+ distributed to dividend and retained earnings and does not appear on a balance sheet as separate entity.
Assets + Expenses = Equity + Liabilities + Income
Within a reporting period, the accounting equation can be written as
+ Assets = Equity + Profit + Liabilities
, where Profit
is the current period profit before dividend. Substituting Profit = Income - Expenses
into the equation and rearranging we get the extended form of the accounting identity above.
The extended accounting equation always holds true. Whenever a new accounting transaction is + recorded you are just changing some variables in this equation. In a double entry, you change two variables, in a compound entry you change several variables.
+If you try to record just one change, for example, just receipt of cash from a customer as
+ increase in Assets
, the equation will break. For cash receipt from customer, you should record an increase in Income
and an equal increase in Assets
.
You may take a mind experiment and thinking of various business transactions and provide
+ examples of four types of double entries:
two variables of the right side are changed;
+both right side and left side are decreased.
+You do not specifically need debits and credits to manipulate the extended accounting equation. + The debits and credits are just a convenient notation system that helps denote which accounts are increased and which decreased.
+A "real" accounting system would have more components, like keeping track + of original paperwork or electronic documents that validate the information + that enters the system.
+On account system side there may be "contra" accounts added that keep track + of changes in original accounts, for example "depreciation" contra account + for "property, plant, equipment" or "refunds" contra account for "sales".
+On recognition, valuation and reporting sides important aspects are:
+accrual basis and recording of receivables and payables;
+{"use strict";/*!
+ * escape-html
+ * Copyright(c) 2012-2013 TJ Holowaychuk
+ * Copyright(c) 2015 Andreas Lubbe
+ * Copyright(c) 2015 Tiancheng "Timothy" Gu
+ * MIT Licensed
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