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0 pointsfluoridation3y ago0 comments

>Wouldn’t it be more logical to show Alice’s balance as $5 and Bob’s balance as -$5?

That wouldn't make sense. Alice sent Bob $5, so now Alice's balance would be $5 and Bob's would be -$5? The amounts should display their balances within the app, and Alice and Bob should have their own personal balances which are independent of the app's. Before the transaction, both Alice and Bob were at $0 on their personal balances and afterwards they were still at $0, since neither of them had more dollar bills on their persons. The difference between their personal balances and their balances in the app is the value you're alluding to. $0-(-$5) for Alice and $0-$5 for Bob. This difference could be interpreted as the amount that each owes to the app (positive for Alice because she owes and negative for Bob because he is owed).

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kojim3y ago

I agree that from a developer's perspective and certainly in the frontend it doesn't make sense to show a positive user balance as negative. But to a finance team, cash on your company's books (debits) needs to have the opposite polarity of money that your users hold (credits). My underlying point is that it's really hard to make that the case without using the credits and debits language.

quacked3y ago

This little comment chain has done more for my understanding of accounting than at least 3 hours of reading online and trying to have my accounting friends explain it.

fluoridationOP3y ago

>But to a finance team, cash on your company's books (debits) needs to have the opposite polarity of money that your users hold (credits).

Then you're arguing how the value should be displayed. There's no reason to prefer one sign or the other in the codebase, as long as it's always displayed correctly to the correct actors.

WorldMaker3y ago

Having been involved in various roles of double entry accounting adjacent tools, the next level up is realizing that it is easier to display the correct sign if you store things unsigned and use debit/credit nomenclature even in your DB model/codebase. It's not just that this makes it easier to talk to the accountants using your system about the internals of that system, but that showing the right sign becomes simple "pattern matching" based on entirely on the type of account and the user's type. There's no "math" involved to switch signs based on how it is "stored" in the codebase, the displayed signs are always a UI element that is clearly dependent on its inputs.

The centuries of accountant's aversion to using negative numbers in day to day accounting usage has abstraction uses even in your codebase.

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