On Tue, 25 Apr 2000, Matt Sisk wrote:
> If I may quote one of my prior emails, I offered the following analogy:
>
> Matt wrote:
> > Just for kicks, let's say we're talking about an investment
> > in rabbits. The central accounting engine should really only
> > be concerned with transactions involving a) cost of initial
> > rabbits, supplies, maintenance, and b) proceeds from rabbit
> > sales. It really doesn't need to be able to make statements
> > about how many rabbits you own at any given time, or the worth
> > of all of your rabbits at that time, or rabbit losses from
> > rabbit plagues or neighborhood dogs; the "rabbit accounting
> > engine" should take care of those messy details.
Well, Matt is wrong. Accounting is about tracking "things".
These things may be "rabbits", "shares of stock", "gold coins" or "dollar
bills".
Selling a rabbit is really exchanging a "rabbit" for some "dollars".
There is nothing special about "dollars".
I get paid my rent in "bushels of soybeans" and have to exchange them (sell)
for something else (rabbits?) to eat.
Actually, I exchange them for "dollars" because that is more convenient.
I assure you that my accountant keeps track of how many beans I have in the
warehouse.
One advantage that gnucash has it that it is multi-currency.
That makes it easier to have one account in "dollars" in NewYork; another in
"Francs" in Paris; and a third in "soybeans" in Raleigh.
I don't have a different ENGINE for each of those. I just have different
ACCOUNTS.
Back to Matt's rabbit example, I need to track the number of rabbits that die.
It IS important when I apply for disaster relief. (Well, they were really
pigs, not rabbits. But the same principles apply.)
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