Double entry accounting is a systematic approach that ensures every financial transaction is recorded in at least two accounts. An account represent a bucket or basket that holds value. Value here means balances or money in other words.
This system follows the principle of duality, which states that every transaction has equal and opposite effects on at least two accounts, meaning that value flows from a source account to a destination account. This ensures that the accounting equation
Assets = Liabilities + Equity
remains in balance. It must be noted the above equation can be expanded to accommodate the Revenues , Expenses and Drawings. Equity is derived from
Equity = Common Stocks + Paid Up Capital + Retained Earning).
Retained Earnings = Revenues — Expenses.
Therefore rewriting the equations as
Assets = Liabilities + ((Common Stocks + Paid Up Capital) +(Revenues — Expenses) — Drawings))
Traditionally an account is usually represented in a T format meaning it got two sides left (Debit — DR) and right (Credit — CR).
double entry accounting command-line application with an entrypoint in bin/, library code
in lib/, and example unit test in test/.
Find more on double entry accounting concept documentation https://medium.com/p/bcc2bf2e78e2
Pull requests are welcome. For major changes, please open an issue first to discuss what you would like to change.
Please make sure to update tests as appropriate.
