double vs. single entry
What exactly is the advantage of double-entry accounting over single-entry accounting? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: double vs. single entry
Double entry accounting makes it very difficult to hide losses and massively inflate your profits...wait, that can't be right, scratch that. I don't know. Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: double vs. single entry
Double entry means that you have one column for money going out of an account and one column for money going into an account. Thus, it very easy to keep track of cash inflow and outflow (just add up the columns). With single entry, there is more error because you mistakenly count a debit as a credit. The advantage is huge when you have to do things by hand. It also helps you track errors more quickly. Fabio On Thu, 27 Jun 2002, Bryan Caplan wrote: What exactly is the advantage of double-entry accounting over single-entry accounting? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: double vs. single entry
Bryan: What exactly is the advantage of double-entry accounting over single-entry accounting? Two advantages come to mind: One is the automatic error prevention of having a built-in redundancy. The other is that every economic exchange by definition involves two quantities. A merchant trades silk for ducats. By making a credit to cash on hand and a debit to silk in inventory, he can keep a running account of the balances in each. All the best, Asa -- It is dangerous to be right when the government is wrong. -- Voltaire
Re: double vs. single entry
fabio guillermo rojas wrote: Double entry means that you have one column for money going out of an account and one column for money going into an account. Thus, it very easy to keep track of cash inflow and outflow (just add up the columns). With single entry, there is more error because you mistakenly count a debit as a credit. The advantage is huge when you have to do things by hand. It also helps you track errors more quickly. What's wrong with negative numbers?! -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
undisplayable prices
Why do some Internet merchants refuse to display prices on some items until you put the affected items in your online shopping cart? I first noticed this at BestBuy.com, but now Amazon.com and CircuitCity.com have also picked up this practice. Here's Amazon.com's explanation, which doesn't explain anything at all: Price Too Low to Display Explained The too low to display message indicates an additional discount is in effect, and this discount is calculated in the Shopping Cart. You can see this price by clicking the product name and then selecting the Add to Cart button on the product information page. Please be assured that simply adding an item to your cart does not obligate you to buy it--you can always delete the item from your cart if you decide not to purchase it. So what's the real explanation? How do these stores benefit by making it slightly harder for shoppers to compare prices?
Re: double vs. single entry
Does anyone answering here know any accounting or are people just guessing? I pulled out an accounting text I keep as a reference and looked up double entry and single entry and they weren't there. My understanding is that the the invention of double entry accounting refers to the invention of the balance sheet. My vague memory on this is that prior to that invention all people had in the way of accounting was ledgers showing transactions and rather haphazard listings of firm's assets and liabilities. If my memory serves me here the invention of the balance sheet allowed quick and easy insight into the book value of the firm which was not a well defined concept before this. Those who are familiar with accounting principles will recognize this as a big change. You could say that the invention of the balance sheet is the beginning of modern accounting. You could go further and say that there is virtually no useful accounting without the balance sheet and that nearly every other modern accounting concept (income statements and cash flow) are linked to the balance sheet. - - Bill
Re: double vs. single entry
After journalizing transactions, and later posting it to its ledger accounts, a worksheet is made to detect errors in computation. Such is the case when the bookkeeper forgets to maintain a double entry in all journalizing or posting, the total amount of the accounts would not be equal to zero. At 04:10 PM 6/27/2002 -0400, you wrote: Double entry accounting recognizes that every transaction must affect at least two different accounts. It is a mathematical consequence of the more primal accounting identity assets=liabilities+owners' equity, or equivalently investment=claims against investments. One of its more attractive qualities (at least to accountants) is that it is easy to audit and track errors. I have never heard of single entry accounting, so I don't completely know how to answer the question as it is posed. As an aside, I have read that the use of debits and credits in the double entry system was a response to the teaching of the Roman Catholic Church in medieval times that negative numbers were instruments of the devil. With debits and credits, a negative number is never used in double entry accounting. (the double entry system was invented by a 14th century Italien monk and mathematician). At 01:13 PM 6/27/2002 -0400, you wrote: What exactly is the advantage of double-entry accounting over single-entry accounting? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks* Kevin D. Sachs, Ph.D. Assistant Professor phone: 513.556.7198 University of Cincinnatifax: 513.556.4891 Department of Accounting/IS email: [EMAIL PROTECTED] 302 Lindner Hall, P.O.Box 210211 Cincinnati, OH 45221-0211 --- Incoming mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.295 / Virus Database: 159 - Release Date: 11/1/2001 --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.295 / Virus Database: 159 - Release Date: 11/1/2001
Re: high school economics
Judging from the market for texts, I am probably alone in believing that most micro texts have it wrong. At the principles level we do not need to be producing students who have a tenuous understanding of what Ph.D. economics students learn. Instead, we should be teaching students how to think like economists. Opportunity cost, gains from trade, how markets work, substitution possiblities in consumption and increasing opportunity cost in production, efficiency, market power and lack thereof, market failure etc. (The intermediate level is a whole different story.) It would be hard to teach high school students to think like economists since there is a time constraint. A year's course in economics can give you the basics but it not transform them to homo economicus-es. --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.295 / Virus Database: 159 - Release Date: 11/1/2001
Re: undisplayable prices
Carl Shapiro and Hal Varian's Information Rules has a good discussion on this point. If price comparisons are easy, then every seller's output is an excellent substitute for every other seller's output. Bill Sjostrom - Original Message - From: Wei Dai [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, June 27, 2002 9:06 PM Subject: undisplayable prices Why do some Internet merchants refuse to display prices on some items until you put the affected items in your online shopping cart? I first noticed this at BestBuy.com, but now Amazon.com and CircuitCity.com have also picked up this practice. Here's Amazon.com's explanation, which doesn't explain anything at all: Price Too Low to Display Explained The too low to display message indicates an additional discount is in effect, and this discount is calculated in the Shopping Cart. You can see this price by clicking the product name and then selecting the Add to Cart button on the product information page. Please be assured that simply adding an item to your cart does not obligate you to buy it--you can always delete the item from your cart if you decide not to purchase it. So what's the real explanation? How do these stores benefit by making it slightly harder for shoppers to compare prices?
Re: double vs. single entry
What's wrong with negative numbers?! Prof. Bryan Caplan Bryan - it's not mathematical. It's book keeping. Keeping the two columns separate is simply easier for finding mistakes. With spreadsheets its easy, but if its teh 13th century and all is done by hand, then it makes a big difference. F
SV: double vs. single entry
The advantage to whom? (If I may be allowed to ask a somewhat simple question? - the accountants? The government? The owner(s)?) Sincerely yours Chresten Anderson -Oprindelig meddelelse- Fra: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]Pa vegne af Bryan Caplan Sendt: 27. juni 2002 19:13 Til: [EMAIL PROTECTED] Emne: double vs. single entry What exactly is the advantage of double-entry accounting over single-entry accounting? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: high school economics
markjohn wrote: . . . A year's course in economics can give you the basics but it not transform them to homo economicus-es. Homines economici, in case anyone wanted to know. -- Anton Sherwood, http://www.ogre.nu/
Re: double vs. single entry
On Thu, 27 Jun 2002, William Dickens wrote: Does anyone answering here know any accounting or are people just guessing? Just enter double entry accounting into google and you can easily find some answers. It hard for us modern people to understand, but simply accounting techniques can make a world of difference of semi-literate people like medieval Europeans. Bryan asked about negative numbers, and as any historian can tell you, it took a long time for negative numbers to become widespread. Fabio
