Early on after 4th diagram, author includes sentence : "Because every transaction appears twice, once positive and once negative"
There is something so obvious about this to accounting folks that they always make the massive jump without any explanation. The previous diagram absolutely does not have positive and negative for each transaction! In fact, there is 5000 going into banking account and 500+5 coming out of it. Nothing in 4th diagram is obviously the negative of that 5k transaction, to me.
Similarly next sentence is "obviously" false: "If you partition the set of nodes into any two disjoint sets, and add up all of the balances in each set, then the sum for the one set is always the negative sum of the other set" -- the sum of the left two balances is minus five, and the sum of right three balances is 505.
And just like that, I'm completely lost and booted out of yet another accounting lesson without passing the introduction :-(
(fwiw, my experience of reading accounting is broadly the same as reading Plato: "it is obviously true that..." What, no, stop, that's not obvious at all, you gotta do better than that! :-)
Anyway, for the example you mention, it's supposed to mean that it takes 5k from the bubble on the left (founder) and gives to next bubble (bank)
Then each line again takes from left and gives to the new bubble on right. So each line is a transaction that balances out by adjusting both sides.
* the article still loses me because it defines transactions one way (the edges) and then seems to make this big switch that each edge/transaction is really two transactions suddenly (one on each side of the edge) .
Similarly the explanation In Wikipedia is completely contrary to my mental framework: "tenant who writes a rent cheque to a landlord would enter a credit for the bank account on which the cheque is drawn, and a debit in a rent expense account. Similarly, the landlord would enter a credit in the rent income account associated with the tenant and a debit for the bank account where the cheque is deposited."
I cannot even begin to parse that, and I'm honestly reasonably bright :-). Paying my landlord is "obviously" a transaction from my banking account (negative) into their banking account (positive). How it becomes four transaction is, as ever, the magic bit glossed over. That landlord is entering "debit for the bank account where the cheque is deposited" just feels like someone is yanking my chain.
Anyvoo! Like with French language, I'll try again one day :-). Merci!
That's actually what's missing in this presentation: how do you deal with time?
Accounting for computer scientists (2011) - https://news.ycombinator.com/item?id=37940973 - Oct 2023 (50 comments)
Accounting for Computer Scientists - https://news.ycombinator.com/item?id=15446202 - Oct 2017 (1 comment)
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If you know it, it's easy to use, so why not? But if you don't, whatever method you come up with to track account balances and revenues vs. expenses is going to be useful enough. For individuals not accounting for receivables, debts, depreciation properly isn't likely to make a big difference.
I take it for granted that people want to be able to read a balance sheet and an income statement.
But most people don't.
Just need aome form of graphic persistence then ways of summing across partitions of nodes to generate reports. And some convenience methods for adding transactions.
Final step would be to slap a CLI or UI on top of everything.