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authorJohn Wiegley <johnw@newartisans.com>2010-02-04 04:23:17 -0500
committerJohn Wiegley <johnw@newartisans.com>2010-02-04 04:23:17 -0500
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-
-\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} \ No newline at end of file