When accountants refer to ledgers, they envision something quite specific. As a programmer, I’m accustomed to thinking in terms of tables of data, but there are particular elements that define a ledger.
Given a basic list of transactions (date, money in, money out, notes), what modifications or additions are needed to transform that list into what accountants would classify as a ledger?
For instance, what formatting is required, does it need to be immutable, must it reflect actual transactions in a bank account, or should it include some form of ‘foreign key’ to specify the entity each transaction pertains to?
Ledgers are characterized by their balance, where a credit to one account or category is matched by a corresponding debit in another. For a transaction to meet the standards of a ledger, it must either be validated by an encompassing transaction, similar to how a database transaction operates, or be supported by an adjustment record that addresses any imbalance. An encompassing transaction ensures that either the entire transaction, including both the debit and credit components, is executed, or none of it is (a rollback).
Ledgers are characterized by their balance, where a credit to one account or category is matched by a corresponding debit in another.
For a transaction to meet the standards of a ledger, it must either be validated by an encompassing transaction, similar to how a database transaction operates, or be supported by an adjustment record that addresses any imbalance.
An encompassing transaction ensures that either the entire transaction, including both the debit and credit components, is executed, or none of it is (a rollback).
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