I figured I might as well take a stab at it. Comments are appreciated – I'll refine the design based on feedback from anyone. I'm going to use SQL Server (2005) T-SQL syntax for now, but if anyone is interested in other languages, let me know and I'll add additional examples.
In a double-entry bookkeeping system, the basic elements are accounts and transactions. The basic 'theory' is the accounting equation: Equity = Assets - Liabilities.
Combining the items in the accounting equation and two types of nominal accounts, Income and Expenses, the basic organization of the accounts is simply a forest of nested accounts, the root of the (minimum) five trees being one of: Assets, Liabilities, Equity, Income, and Expenses.
[I'm researching good SQL designs for hierarchies generally ... I'll update this with specifics later.]
One interesting hierarchy design is documented in the SQL Team article More Trees & Hierarchies in SQL.
Every transaction consists of balanced debit and credit amounts. For every transaction, the total of the debit amounts and the total of the credit amounts must be exactly equal. Every debit and credit amount is tied to one account.
[More to follow ...]
