125 lines
No EOL
6 KiB
Text
125 lines
No EOL
6 KiB
Text
{\rtf1\ansi\ansicpg1252\cocoartf949\cocoasubrtf460
|
|
{\fonttbl\f0\fmodern\fcharset0 Courier;}
|
|
{\colortbl;\red255\green255\blue255;}
|
|
\pard\tx560\tx1120\tx1680\tx2240\tx2800\tx3360\tx3920\tx4480\tx5040\tx5600\tx6160\tx6720\sl264\slmult1\ql\qnatural\pardirnatural
|
|
|
|
\f0\fs28 \cf0 Ledger is an accounting tool with the moxie to exist. It provides no\
|
|
bells or whistles, and returns the user to the days before user\
|
|
interfaces were even a twinkling in their father's CRT.\
|
|
\
|
|
What it does offer is a double-entry accounting ledger with all the\
|
|
flexibility and muscle of its modern day cousins, without any of the\
|
|
fat. Think of it as the Bran Muffin of accounting tools.\
|
|
\
|
|
To use it, you need to start keeping a ledger. This is the basis of\
|
|
all accounting, and if you haven't started yet, now is the time to\
|
|
learn. The little booklet that comes with your checkbook is a ledger,\
|
|
so we'll describe double-entry accounting in terms of that.\
|
|
\
|
|
A checkbook ledger records debits (subtractions, or withdrawals) and\
|
|
credits (additions, or deposits) with reference to a single account:\
|
|
the checking account. Where the money comes from, and where it goes\
|
|
to, are described in the payee field, where you write the person or\
|
|
company's name. The ultimate aim of keeping a checkbook ledger is to\
|
|
know how much money is available to spend. That's really the aim of\
|
|
all ledgers.\
|
|
\
|
|
What computers add is the ability to walk through these postings,\
|
|
and tell you things about your spending habits; to let you devise\
|
|
budgets and get control over your spending; to squirrel away money\
|
|
into virtual savings account without having to physically move money\
|
|
around; etc. As you keep your ledger, you are recording information\
|
|
about your life and habits, and sometimes that information can start\
|
|
telling you things you aren't aware of. Such is the aim of all good\
|
|
accounting tools.\
|
|
\
|
|
The next step up from a checkbook ledger, is a ledger that keeps track\
|
|
of all your accounts, not just checking. In such a ledger, you record\
|
|
not only who gets paid---in the case of a debit---but where the money\
|
|
came from. In a checkbook ledger, its assumed that all the money\
|
|
comes from your checking account. But in a general ledger, you write\
|
|
posting two-lines: the source account and target account.\
|
|
@emph\{There must always be a debit from at least one account for every\
|
|
credit made to another account\}. This is what is meant by\
|
|
``double-entry'' accounting: the ledger must always balance to zero,\
|
|
with an equal number of debits and credits.\
|
|
\
|
|
For example, let's say you have a checking account and a brokerage\
|
|
account, and you can write checks from both of them. Rather than keep\
|
|
two checkbooks, you decide to use one ledger for both. In this\
|
|
general ledger you need to record a payment to Pacific Bell for your\
|
|
monthly phone bill. The cost is $23.00, let's say, and you want to\
|
|
pay it from your checking account. In the general ledger you need to\
|
|
say where the money came from, in addition to where it's going to.\
|
|
The transaction might look like this:\
|
|
\
|
|
@smallexample\
|
|
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\
|
|
@end smallexample\
|
|
\
|
|
The first line shows a payment to Pacific Bell for $23.00. Because\
|
|
there is no ``balance'' in a general ledger---it's always zero---we\
|
|
write in the total balance of all payments to ``Pacific Bell'', which\
|
|
now is $223.00 (previously the balance was $200.00). This is done by\
|
|
looking at the last transaction for ``Pacific Bell'' in the ledger, adding\
|
|
$23.00 to that amount, and writing the total in the balance column.\
|
|
And the money came from ``Checking''---a withdrawal of $23.00---which\
|
|
leaves the ending balance in ``Checking'' at $77.00. This is a very\
|
|
manual procedure; but that's where computers come in...\
|
|
\
|
|
The posting must balance to $0: $23 went to Pacific Bell, $23 came\
|
|
from Checking. There is nothing left over to be accounted for, since\
|
|
the money has simply moved from one account to another. This is the\
|
|
basis of double-entry accounting: that money never pops in or out of\
|
|
existence; it is always a posting from one account to another.\
|
|
\
|
|
Keeping a general ledger is the same as keeping two separate ledgers:\
|
|
One for Pacific Bell and one for Checking. In that case, each time a\
|
|
payment is written into one, you write a corresponding withdrawal into\
|
|
the other. This makes it easier to write in a ``running balance'',\
|
|
since you don't have to look back at the last time the account was\
|
|
referenced---but it also means having a lot of ledger books, if you\
|
|
deal with multiple accounts.\
|
|
\
|
|
Enter the beauty of computerized accounting. The purpose of the\
|
|
Ledger program is to make general ledger accounting simple, by keeping\
|
|
track of the balances for you. Your only job is to enter the\
|
|
postings. If a posting does not balance, Ledger displays an\
|
|
error and indicates the incorrect posting.@footnote\{In some\
|
|
special cases, it automatically balances this transaction for you.\}\
|
|
\
|
|
In summary, there are two aspects of Ledger use: updating the ledger\
|
|
data file, and using the Ledger tool to view the summarized result of\
|
|
your transactions.\
|
|
\
|
|
And just for the sake of example---as a starting point for those who\
|
|
want to dive in head-first---here are the ledger transactions from above,\
|
|
formatting as the ledger program wishes to see them:\
|
|
\
|
|
@smallexample\
|
|
2004/09/29 Pacific Bell\
|
|
Payable:Pacific Bell $-200.00\
|
|
Equity:Opening Balances\
|
|
\
|
|
2004/09/29 Checking\
|
|
Accounts:Checking $100.00\
|
|
Equity:Opening Balances\
|
|
\
|
|
2004/09/29 Pacific Bell\
|
|
Payable:Pacific Bell $23.00\
|
|
Accounts:Checking\
|
|
@end smallexample\
|
|
\
|
|
The account balances and registers in this file, if saved as\
|
|
@file\{ledger.dat\}, could be reported using:\
|
|
\
|
|
@example\
|
|
$ ledger -f ledger.dat balance\
|
|
$ ledger -f ledger.dat register checking\
|
|
$ ledger -f ledger.dat register bell\
|
|
@end example} |