Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Accounting
Reexamination Certificate
1996-08-07
2001-08-14
Weinhardt, Robert A. (Department: 2764)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Accounting
Reexamination Certificate
active
06275813
ABSTRACT:
BACKGROUND OF THE INVENTION
The present invention relates to a computerized system of double-entry financial accounting and, in particular, to a method of entering data from financial transactions into a computer program that posts the entered information according to the known accounting theory of debit and credit. In accounting the term “posting” means transferring the debits and credits from the journal to the general ledger.
In prior art computerized financial accounting methods, the accuracy of posting of financial data into an accounting program depended on the degree of the operator's accounting knowledge. For example, when posting a financial transaction into known accounting programs, the operator had to memorize that debiting an account increases assets or expenses and decreases liabilities, whereas crediting an account decreases assets or expenses and increases liabilities or income. Evidently, when dealing with a larger number of different accounts, the entries are error-prone and, especially for a non-accountant, the errors are difficult to detect.
It is, therefore, an object of the present invention to provide a new posting method which, in combination with a computer program, avoids the disadvantages of prior art accounting systems.
In particular, an object of the invention is to provide a method of recording financial transactions both in a book of original entry and in the computer in a way that guides the operator to make an obviously correct posting decision without the need of memorizing the debit and credit theory.
Another object of the invention is to improve the detectability and correctability of accounting errors.
A further object of the invention is to substantially expedite the actual entry of accounting data into the computer.
SUMMARY OF THE INVENTION
The invention is based on the fact that any financial transaction can be defined by a single posting record that includes, apart from its reference number, date, currency and monetary amount, a categoric directional code consisting of a destination category and a source category. Preferably, the destination and source categories are separated by a direction indicating graphic character, such as an arrow “<” pointing from the source side (where the amount cones from) to the destination aide (where the amount goes to) in the transaction. The two categories are selected from the four basic accounting categories (ctg) of income (I), expenses (E), assets (A) and liabilities (L), whereby the source category always indicates the credit side (the right side), and the destination category the debit side (the left side) of the assigned T-account in the general ledger. In this way, the categoric directional code in the form “destination ctg symbol<source ctg symbol” is prepared to visually indicate not only the direction of transfer of money in a transaction, but also the posting of the amount in a corresponding T-account.
According to one feature of the method of the invention, a descriptive directional code in the form “destination ctg symbol and account name<source account name and ctg symbol,” is first hand-written into a book or journal of original entry, and verified by means of a verification table. A numeric directional code is then derived from the descriptive code. The numeric directional code has the form “destination account number<source account number,” whereby the first digit of each of the two account numbers is correlated to the corresponding category and the remaining digits are correlated to the corresponding account name in the descriptive code.
The complete posting record, which is hand-written in the book of original entry, has the form “reference no. and date, amount and currency symbol, and the numeric directional code.” In this form, it is ready for being copied into the computer. In practice, it is of advantage when the record of a financial transaction in the book, apart from the aforementioned descriptive code, also contains an optional description of attributes of the transaction. The descriptive code and/or notes remain in the book only and are not transcribed into the computer.
According to another feature of the invention, a transcription program guides the user to enter into the computer only those directional posting records that have the prescribed format. The transcription program automatically creates a database or journal file that stores the directional posting records pertaining to a given time period. It is advantageous for the proper traceability of the posting records that any additions, deletions and other changes in the database file be first executed in the book of original entry and only then entered into the computer by the aforementioned transcription program.
According to still another feature of the invention, the transcription program automatically creates in the computer an elementary account list file containing the titles (i.e. the account numbers and names) of four basic accounts numbered 100, 200, 300 and 400 whose first digit is correlated to one of the four accounting categories.
Once a categoric or a descriptive directional code of a transaction has been determined and noted in the book of original entry, the operator routinely selects, by means of a below described account directory, the numbers of destination and source accounts to be employed in the numeric directional code. An account directory containing the account names and numbers, is updated by the operator after a new descriptive account name has been recorded in the book. By means of an account list update program, the operator then enters the account names and numbers (or supplements the names of all new accounts) under corresponding categories into an account list file in the computer.
REFERENCES:
patent: 4642767 (1987-02-01), Lerner
patent: 5117356 (1992-05-01), Marks
patent: 5189608 (1993-02-01), Lyons et al.
patent: 5193055 (1993-03-01), Brown et al.
patent: 5317504 (1994-05-01), Nakayama
patent: 5390113 (1995-02-01), Sampson
Business Programs for TRS-80 Model I/III, Charles D. Sternberg, 1980, pp. 1-3, 5-46 and 261-264.
Striker Michael J.
Weinhardt Robert A.
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