Comment by amluto
1 year ago
I understand this. But we’re talking about computers, not Italian merchants. Italian merchants had actual pieces of paper. Computers have tables and views and frontends that are separate from the tables.
Any self-respecting accounting system should be able to produce a balance sheet that matches the conventions you’re describing. I don’t think it follows that the actual numbers in the database that get summed to produce the total liabilities should be positive.
I've often wondered about this in the shower. Why debits and credits, when we can just make income negative and let everything sum to 0? Then you can track the balance for each account in a single field in the database.
And the answer is that "0" first entered Europe around the time they invented double-entry bookkeeping there. Negative numbers reached Europe centuries after that.
I showed the internals of a number-line-based accounting systems to an accountant once, and he was so confused by the negative incomes.
https://en.wikipedia.org/wiki/Negative_number#History
https://en.wikipedia.org/wiki/Double-entry_bookkeeping#Histo...
I think we are talking about two different things. Yes, of course you can build an accounting system using whatever database algorithm and programming framework you like. But your users expect debits and credits and A=LE or A-L=E because that’s what their auditors expect.
In the scenario four I presented earlier, I believe it is intuitive to think of unearned revenue (liability) as a positive number. When the customer picks up the order, the unearned revenue will be transferred to equity.