Comment by jfengel
1 year ago
I've never understood that either. As a computer guy it always struck me as a redundancy -- the kind of redundancy where one thing will always eventually be wrong.
I assumed it has to do with the fact that it was invented for bookkeeping by hand. Accountants assure me that it's even more important with computers, but I've never managed to figure out how that works
Double entry accounting is still error prone, but single entry accounting is fraud prone.
A single debit can result in many credits.
A single record can (and will) be lost. Network issue, db issue, etc., some transactions will not make it to the db.
With double entry you at least have a chance of reconciling the lost transaction.
> As a computer guy it always struck me as a redundancy -- the kind of redundancy where one thing will always eventually be wrong.
That's the purpose. If you have a system with no redundancy, it's equally true that something will always eventually be wrong. But in that case, you'll have no way of knowing what's wrong.
With the redundancy, you can detect problems and often determine what happened.
It is not a redundancy. Actually the meaning of a transaction encoded in a pair of accounts. You will need to store it somewhere anyway in a real world scenario, but predefined account pairs is the universal language. The accounting system.
I've been doing this so long that I've finally realized that if someone can't explain why something is the way it is, that means it's wrong, or at least some arbitrary choice among several equally good alternatives.
Being able to explain it is something different then you being able to understand it.
And double entry bookkeeping should be both easy to explain (there are countless articles for it, precisely because it is a pretty easy concept) And easy to understand if you have ever tried to keep a ledger of transactions around and wanted to audit it for errors.
I always get hung up on the different kinds of accounts and their respective definitions of "credit" and "debit". It isn't that much to memorize but it's very counter to the way I understood those terms and it keeps throwing me off.
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https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...
The funny thing with debit/credit wall: only long dead Italian merchchants knew its purpose.
Neither have I. It always seems like a massive cargo culting. Human accountants are liable to make very different kinds of mistakes than computers.