Hi rendaw, I made an account just to reply to you because I think your questions are excellent ones.

I am a CPA by background. While much of my professional work today involves programming and working with data, I continue to work primarily in accounting and finance contexts because it is the type of work that I find most interesting.

I don't have a ton of time right now but let me at least answer your first question "what are you trying to solve by doing accounting?". At its core double-entry accounting is a control system (e.g. safeguarding the resources / assets of a corporation by tracking their use). The most important control is that debits must always equal credits. You might understand that in the context of a balance sheet, however it's important to recognize that double-entry accounting systems record business events by way of journal entries. A valid journal entry must include two or more accounts where the sum of debited amounts always equals the sum of credited amounts (if you want to understand why that is a rule I can talk about that in another post). It is a simple & rigid rule, however it still affords enormous flexibility in terms of being able to precisely express business events.

All financial statements are derivative of a series of time ordered journal entries. This series of entries is known as the general journal (not the general ledger which is more often talked about). The general journal is basically just a log of business events. Business events recorded in the form of journal entries are discretely understandable, although you often need the context of other entries to be sure about what's actually occuring.

It's also very important to recognize that this log of journal entries is append-only and immutable. If a mistake is made you never go back a delete an old journal entry, you just make a new one to correct it (sometimes called an adjusting entry). This preserves the ability to review journal entries and intuitively understand what a business is doing over time.

For example, when a company makes a sale you might see a journal entry where accounts receivable is debited and the sales account is credited. A week later you might see a journal entry where cash is debited and accounts receivable is credited, reflecting that the amount for the sale made a week earlier was collected.

This concept of an immutable time-ordered log of events is / was a powerful and useful idea for some obvious and not so obvious reasons that I could talk about for days.

I believe this blog post is also valuable to read and it specifically mentions accounting data structures (I believe it is fairly well known) https://engineering.linkedin.com/distributed-systems/log-wha...

Can talk more later if anyone is interested.

user:	LeanOnSheena
created:	October 21, 2023
karma:	43