PTA-GLOSSARY(7) Miscellaneous Information Manual PTA-GLOSSARY(7)

pta-glossary — fundamental terms used for plain text accounting

The following terms are fundamental to understanding pta(1) and are used consistently throughout the documentation:

account entry
A record containing the following fields:
year
a four-digit unsigned integer
month
an integer in the range from 1 to 12
day
an integer in the range from 1 to 31, typically used for the day of booking
id
a string which does not need to be unique, typically used for booking identifiers or booking numbers
amount
a floating point number, with the currency always being the same
text
a string, typically used to state the purpose or the business partner

Account entries are used to describe all sorts of values (assets, liabilities, and equity) and payments (both incoming and outgoing). They can represent anything that has a well-defined monetary value.

A list of account entries, ordered chronologically. Each account is uniquely identified by an unsigned integer number called the account number. Use accounts to collect entries that serve a common purpose. Accounts can represent assets (e.g. cash in the wallet, bank accounts, invoices issued to customers, stocks of goods, real estate, business equipment, securities, and so on), liabilities (e.g. credit card accounts, invoices received that need to be paid, and so on), equity (e.g. outstanding shares), revenues (e.g. for services rendered, for goods sold, or interest received), and expenses (e.g. for goods bought, for travel costs, or for interest paid).

Define such accounts as are meaningful for the purpose of the specific bookkeeping in question. Many standardized systems of accounts exist; using one of them may help clarity and consistency, but it is not required. Even when using a standardized system of accounts, it is typically sufficient to define and use only a small subset of the accounts specified by the standard.

The meaning of the sign certainly needs getting used to:

account class
assets property owned has negative sign
equity property owned has positive sign
liabilities debt owed has positive sign
revenues incoming payments have positive sign
expenses outgoing payments have negative sign

Accounts are defined in pta-accounts(5) and the content of accounts can be displayed with pta(1) -a.

journal entry
A record containing the same fields as an account entry, but two account numbers in addition, called the “debit account” and the “credit account”, always cited in this order. A journal entry describes an elementary business transaction, in the sense that it subtracts the amount from the debit account and adds the same amount the credit account. For example, when paying off a debt, the debit account would typically be a liability account (subtracting something there means reducing the debt) and the credit account would typically be an asset account, usually a bank account (adding something there corresponds to reducing the bank balance).

Creating a journal entry implicitly creates a corresponding account entry on the debit account, inverting the sign of the amount, and another corresponding account entry on the credit account, with the amount having the same sign as in the journal entry. Consequently, creating a journal entry always leaves the sum of all accounts constant, and since that sum starts at zero, it always remains zero.

Complex business transactions — for example purchases including sales tax or buying items of diverse kinds in a single transaction — are typically represented using multiple journal entries.

A list of journal entries, ordered chronologically. It is typically used to represent all business transactions that occurred during one accounting period, typically during one year.

The format of the journal file is documented in pta-journal(5).

A subaccount is a subset of the account entries of an account. Each subaccount is uniquely identified by the pair (account number, subaccount name). For example, an account for fruits might contain subaccounts for apples and oranges. Currently, subaccounts cannot be divided further. For example, a sub-subaccount for Granny Smith within the subaccount for apples is not supported.

While accounts need to be predefined in the file accounts.txt before they can be used in the journal, an important advantage of subaccounts is that they can be used spontaneously. As soon as at least one account entry is associated with a subaccount, that subaccount exists.

An account entry can either be part of exactly one subaccount, or it can be outside all subaccounts. For example, a shipment containing both apples and oranges should probably be split into two entries, such that each entry can be associated with the appropriate subaccount. On the other hand, a surprise shipment of martian lichen leaves the choice of either booking it without specifying any subaccount, for example because such exotic merchandise is not expected to arrive again, or of creating a subaccount for martian lichen on the spot.

The content of subaccounts can be displayed with pta(1) -s.

A cost center is a set of journal entries. Consequently, while a subaccount is restricted to one single account, a cost center always spans multiple accounts. Use cost centers to track the balances of parts of the bookkeeping separately. For example, if a company has a number of branch stores, one might create a cost center for each branch store and another one for the head office. As another example, if a company has a number of very different product lines, one might create one cost center for each product line. There is no rigid prescription how cost centers can be used; any set of journal entries can be defined as a cost center. Currently, cost centers need to be disjunct and cannot be subdivided.

Cost centers are also used to manage financial investments. Create one cost center for each security, and book all related transactions to that cost center, including purchases, sells, payments of interest or dividend, surcharges, fees, and taxes. This allows tracking the performance of each security individually.

Account lists and balance sheets for cost centers can be displayed with pta(1) -c, and profits and losses can be shown with pta(1) -p.

pta(1), pta-accounts(5), pta-journal(5)

Ingo Schwarze <schwarze@openbsd.org>

September 27, 2020 OpenBSD 6.7