Note : Les descriptions sont présentées dans la langue officielle dans laquelle elles ont été soumises.
' 2121~18 EXP~$S ~L L~L NO. IB846764028
METHOD AND ELECTRONIC APPARATUS FOR
PERFORMING BOOKKEEPING
BACKGROUND OF THE INVENTION
The present invention relates generally to a method and
electronic-apparatus for classifying large volumes of raw data
and, in particular, to a method and electronic apparatus for
performing combinatorial bookkeeping.
Many enterprises generate large volumes of data entries,
each such entry having associated with it one or more items
representing important in~ormation. Typically, larger
enterprises are computerized and the data entries are inputted
into and/or generated by a mainframe computer and then
transferred to a mass storage device such as a magnetic tape for
later use in various data analysis and report generating
programs. For example, a receiving department or a stock room
accepts a delivery of parts to be placed into inventory. At
least the part number and quantity must be inputted into the
computer for later use in inventory, manufacturing and accounting
programs.
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Various specialized computer programs have been written to
organize large volumes of data entries. For example, U. S.
Patent No. 4,346,442 shows a program for processing data entries
related to a securities brokerage/cash management system. In
U.S. Patent No. 4,694,397, there is shown a computer system for
interfacing a banking system and a brokerage system. U.S. Patent
No. 4,506,326 discloses an apparatus and method for synthesizing
a query for accessing a relational database. Of course, there
are also many commercial database management programs available
today. However, many specific applications have not been
addressed.
For example, when transactions are recorded directly into
accounts, it is difficult to see the total effect of any one
transaction upon an entity by looking at the accounts.
Accordingly, the journal or book of original entry was created
and is now an integral part of accounting. There appear to be
few, if any, formal reports of the journal in the history of
accounting. The first level of accounting data, the journal, has
received little research attention. To many observers, the
journal is merely a log of activity, i.e. the input data from
which a ledger is derived. Other than the ndebit-credit balance
test" and the ~does-the-account-exist test", computer systems
often leave the completeness and correctness of accounting
matters to auditors and accounting supervisors.
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Specifically, with respect to combinatorial bookkeeping, a
method of bookkeeping wherein the complete journal entry is
processed intact in the bookkeeping records, the two-forms wllich
are currently being practiced, that is, double-entry and
single-entry, are predominantly manual. A number of single-entry
methods have been advanced, including methods utilizing adding
machines, posting machines, punched cards, carbon-paper systems,
and relational database systems. The present invention of
electronic bookkeeping applies predominantly to double-entry
bookkeeping, but could also apply to single-entry bookkeeping in
the sense that single-entry bookkeeping has features which are
concurrent with double-entry bookkeeping.
The traditional practice of double-entry bookkeeping
requires two inputs, (a) a log of activities known as the journal
and (b) a chart of accounts, the list of criteria or attributes
to be measured in the process-. Output is a classification of
financial effects known as the ledger. Entries in the journal
must be composed of accounts included in the chart. The records
of both the journal and the ledger contain debit and credit
divisions. Transactions are analyzed and entered on the journal
so that each transaction contains equal debits and credits (in
monetary terms).
Single-entry procedures, on the other hand, tabulate a
single item. In its ultimate form, single-entry involves a count
of each asset and liability with a final balancing item inserted
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into the financial statements. More often, single-entry
procedures ta~ulate like items, such as cash receip~s from
collection of customer accounts. These totals- are later
converted into double-entry records in many systems of
accounting. Conversion of single-entry totals to double-entry
records is allowable, but not useful in the present system. A
third form of single-entry is the tabulation of non-monetary or
other information not required by traditional bookkeeping. This
third form is incorporated into the present application.
Journal entries are posted to ledger accounts. All of the
information contained in the ledger must be available in a
journal entry. The posting is a procedure of sorting and
copying, i.e., each part (usually one line of several in an
entry) is copied to its proper ledger. The result is a ledger
which is in sequence and which also balances in total by the
debit and credit criterion. The ledger is itself summarized via
a procedure known as trial balance.
A number of approaches have been developed to reduce the
sorting and copying activity. Special journals have been
designed to summarize large numbers of similar transactions such
as selling, purchasing, receiving, payroll, and shipping. Often,
the special journals appear in single-entry form and the totals
are entered into the double-entry system. These special journals
have been incomplete and seemingly all systems of account use a
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general journal for transactions whicll do not fit the design of
the special journals.
Commercial computerized bookkeeping packages are available
which have the ability to trace from one line of a journal entry
posted to a specific ledger account to the other postings of that
entry. However, no intermediate record of summaries of like
journal entries are utilized. The intermediate summaries in the
present application create totals for each 'event' and simplify
both the computer and supervisory processes of bookkeeping.
A frequent assumption of computerized general ledger
packages is that specific account debits or account credits are
limited to one occurrence per transaction. This policy
simplifies audit of the transaction and also simplifies the
computer process of transaction backup. The above assumption is
likewise incorporated into the present invention.
A second assumption of -present computerized generalized
ledger packages is that a log of activity is maintained either in
transaction backup form or in a detailed sequential, historic
file of journal entries. These historic and/or backup files are
useful and may be utilized in the present invention when
operating in batch mode. Real-time operation of the present
system would immediately precede the creation of historic or
backup files.
Two schools of thought which are pertinent to and
incorporated in the present invention are Matrix Accounting and
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Computer Science techniques of Sparse Matrix. Although Matrix
Accounting has been known since 1846, the concept has been
limited to two dimensions, relating to the debit- and credit
dimensions of the ledger. The present invention incorporates
multi-dimension matrices into the logic of the journal and
preserves the existing journal feature of balance of debit and
credit. Sparse matrix techniques are often introduced in studies
of data structures. Their success depends upon (a) a low degree
of data fill (most possible occurrences of data are in fact
vacant) and (b) the existence of a programming language which can
allocate -a new design for data storage while the program is
operating. Until now, the sparse matrix approach has not been
used in accounting.
The difficulties encountered in the prior art discussed
hereinabove are substantially eliminated by the present
invention.
SUM~RY OF THE INVENTION
Accordingly, it is an object of the present invention to
provide a method for electronically performing bookkeeping.
It is also an object of the invention to provide a method
for electronically performing bookkeeping which eliminates the
ledger necessitated in the prior art.
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Another object of the present invention is to provide a
method which utilizes an intermediate record for electronically
performing bookkeeping.
A further object of the present invention is to provide a
method for electronically performing combinatorial bookkeeping in
which a summary of each type of transaction is created to
facilitate supervision of bookkeeping and analysis of transaction
flows.
Yet another object of the present invention is to provide a
method which utilizes a sparse matrix for electronically
performing bookkeeping.
One other object of the present invention is to provide a
method for electronically performing bookkeeping which updates
the account balances within the chart of accounts.
One further object of the present invention is to provide a
method for electronically performing bookkeeping which includes
security features for detecting predetermined illegal or unusual
transactions for further inspection.
Still another object of the present invention is to provide
a method for electronically performing bookkeeping which can
generate flow reports thereby eliminating some worksheets
necessitated in the prior art.
An additional object of the present invention is to provide
a method for electronically performing bookkeeping which includes
data other than raw accounting data.
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A further object of the present invention is to provide an
electronic apparatus for performing bookkeeping.
These and other objects of the present invention will become
apparent upon reference to the following specification, drawings
and claims.
By the present invention, it is proposed to overcome the
difficulties encountered heretofore. The present invention
concerns a method and apparatus for electronically performing
bookkeeping upon a plurality of accounting journal entries
comprising a parental set for a predetermined period of time,
each journal entry of the plurality of accounting journal entries
having a transaction identifier, at least one account number and
at least one data component associated with each account number,
each journal entry having been prepared based upon criteria
associated with a particular, definition within a predetermined
chart of accounts. First, the predetermined chart of accounts
associated with the plurality of journal entries is read
electronically. The predetermined chart of accounts must have at
least one account number and each account number has an opening
balance. A set of account-section numbers is then created for
each account number. The plurality of journal entries is read
and one of the account-section numbers is assigned to each of the
account numbers in the journal entry. The assigned
account-section numbers along with the associated data components
are then sorted in a predetermined order. A design for the
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predetermined order is identified and compared with stored design
records to see if such a design already exists. If not, the new
design is stored. If so, the associated data components are
added to the accumulated total for each account-section number.
A tally representing the number of additions to the set of
account-section numbers is increased by one and an entry number
is added to a list for the particular design record. The process
is then repeated for each journal entry.
Opening balances may be updated periodically by adding the
accumulated totals for all of the account-section numbers.
Account numbers may include an indicator of criteria
associated with the particular definition of the predetermined
chart of accounts. For example, if double-entry bookkeeping is
performed, the criteria would indicate that separate
account-section numbers should be created and assigned for debit
and credit for each account number.
A sparse matrix of n-dimension may be used for creating,
searching for, and accumulating totals for designs which identify
the journal entries.
BRIEF DESCRIPTION OF THE DRAWINGS
In the drawings:
Fig. 1 is a schematic perspective view of a prior art
two-dimensional accounting matrix;
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Fig. 2 is a schematic perspective view of a
three-dimensional accounting matrix according to the present
invention;
Fig. 3 is a schematic representation of the accoun~ing
journal summary data structure according to the present
invention;
Fig. 4 is a block diagram of the apparatus according to the
present invention;
Fig. S is a schematic representation of a list of item
indicators according to the present invention;
Fig. 6 is a flow diagram of the method according to the
present invention applied to double-entry accounting journal
entries;
Fig. 7 is a schematic representation of a chain of item
indicators according to the present invention;
Fig. 8 is a sample chart of accounts and trial balances
showing the intermediate record of the present invention as
applied to double-entry bookkeeping;
Fig. 9 is a prior art sample listing of lines of the journal
entry transactions in specific ledger accounts;
Fig. 10 is a sample general form of the journal which is
similar in both the prior art and the present invention; and
Fig. 11 is a sample diagram illustrating the pointers of the
present invention.
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DESCRIPTION OF T~IE PREFERRED EMBODIMENT
The present invention relates to a method and appara~us for
electronically performing bookkeeping upon a plurality of
accounting journal entries comprising a parental set for a
predetermined period of time, each journal entry of the plurality
of accounting journal entries having a transaction identifier, at
least one account number and at least one data component
associated with each account number, each journal entry having
been prepared based upon criteria associated with a particular
definition within a predetermined chart of accounts.
The plurality of journal entries to be processed and
classified in accordance with the present invention is known as a
parental set of items. A parental set, in general, includes all
possible combinations drawn from a list wherein no item from the
master list can appear more than once in any combination. Two
conditions apply: (1) the particular sequence of items within the
combination is not important. Synonyms, the different sequences
of identical item indicators are sorted into ascending sequence
and their synonymous identity destroyed, and (2) specific
combinations are expected to repeat frequently.
In general, as each data entry is created or read from
storage, a mapping function such as a hashing algorithm is
applied to assign item indicators for each of the item numbers
based upon the associ~ted quantities thereby generating an
expanded parental set. An item indicator uniquely defines an
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associated item in the expanded parental set, reflects the
originality of the item in the expanded parental set, and
identifies the use of the item in the context of the quantity.
The joint usage of a mapping function thashing) and a
multi-dimensional sparse matrix, which will be discussed
hereinafter, allows the data to drive the storage and much of the
retrieval of information. This is thus a predominantly
data-driven process.
The item indicators for the data entry are sorted into
ascending numerical sequence and an n-dimension sparse matrix is
selected where ~n~ is the number of items in the data entry. If
the present combination of item indicators is new, a design
record is created for the database based upon the sparse matrix
and including the item indicators, the associated quantity sums,
the total number of data entries summarized in the design record
and a pointer (a list or chain of entry numbers) to the records
of the data entry detail. The quantities for the present data
entry are added to the quantity sums and the entry number is
stored in the pointer chain. After all the data entries have
been processed, a search routine can be utilized to review the
various design records as desired.
A specific example of a practical use for the system
according to the present invention is in the field of
bookkeeping. Raw data, typically provided from a computer
operation or a mass storage device such as a computer backup
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tape, can be a plurality of journal entries (data entries) each
of which is formed of a minimum number of lines which correspond
to conditions defined in the chart of ~accounts, i.e.,
single-entry accounts are associated with journal entries with
one-line minimum, double-entry accounts are associated with
journal entries with two-line minimum and with the condition that
debit dollars of the journal entry equal credit dollars of the
same entry. Triple-entry accounting has been suggested, but the
concept has not been implemented.
The plurality of journal entries to be processed and
classified in accordance with the present invention is known as a
parental set of lines. Each classified item, known as an account
in bookkeeping, must contain information regarding its title,
account number, and its opening balance, debit or credit. A list
of all account numbers and associated data components, a chart of
accounts, is utilized to generate account-section numbers (item
indicators). For example, one account-section number can
represent a debit to an account number and another
account-section number can represent a credit to the same account
number. Thus, with respect to double-entry bookkeeping, an
account-section number is generated for activity which, under the
prior art, is copied to either side, debit or credit, of a
particular account. A mapping function is applied to the journal
entry lines in the parental set to assign the appropriate
account-section numbers resulting in an expanded parental set.
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An activity is an account-section number associated with a
particular quantity.
With respect to double-entry bookkeeping, the method of the
present invention replaces the transaction records of the ledger
with an intermediate record. The intermediate record is
referenced to a chart of accounts so as to retain balance and
transaction totals of the information found in a ledger.
The intermediate record is a total of all like transaction
designs which are found in the journal. The transaction design
is defined as that combination of account-debits and
account-credits from the Chart of Accounts which is used in a
complete journal entry. The values and explanations of the
journal entry are data held within the transaction design.
As each journal entry is encountered in the bookkeeping
process, the computer checks whether that design is contained in
the database of journal entry -summaries. If not, a new summary
is created to match the account-debit and account-credit
attributes of the journal entry being processed. At the point of
summary creation, a new combination is indicated and security
procedures can be invoked. The pointers which reference ledger
totals to the summaries are reorganized with each new design
added to the database.
The monetary (or other) values of each journal entry are
added to the summary which matches the entry design. A list of
identifiers of entries which fit each particular design is
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maintained so the detail may be extracted as needed. In
addition, the list of identi~iers allows the system to be
verified by audit or restored upon machine failure.
The amount of computer disk movement is expected to be
reduced through the use of this database of journal entry
summaries. In the prior art, each line of a journal entry was
copied to each ledger account affected, whereas in most cases,
the proposed system would add all totals on one record and write
to disk or other memory only once. The process of this
application will thus operate faster.
Such a database which aggregates repetitious mainframe
accounting journal entries in a database will enable two
improvements to the bookkeeping process. First, the manual
ledger is replaced by an electronic intermediate record which is
more versatile and easier to manipulate for real-time balances,
etc. Second, the ability to identify entry combinations before
adding to totals and tally is expected to aid in security
procedures and printed reports. The latter eliminates some of
the need for manual worksheets.
The ledger and trial balance procedure of accounting is not
a summary of journal entries. It is a summary of individual
lines of the journal entries. Distinctions involved in the basic
classification of transactions become obscured in the normal
bookkeeping process. A credit sale is not precisely the same as
a cash sale, yet both are normally posted to the Sales account.
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Similarly, a taxable sale is not identical to a non-taxable
sale. The word ~design~, defined above, can be used-to identify
~he forms of journal entries. Examples of the forms of a
non-taxable service sale and a taxable service sale are:
Debit Assets $500
Credit Revenues $500
and
Debit Assets $~25
Credit Liabilities $ 25
Credit Revenues $500
In the system, according to the present invention, all journal
entries of a given design, i.e., those which contain the
identical debit or credit attributes of the identical accounts,
are aggregated in a database design record which contains totals
for the dollar values of each summary entry as well as a tally of
the number of occurrences of the particular design.
Bookkeeping usage implies that the database will be created
earlier in time, perhaps immediately after a journal entry is
created or entered. Three forms of inspection can be applied to
newly-created entries. First, specific non-allowable entries can
be placed in the database before bookkeeping begins, with an
alarm reported whenever said non-allowable entry has, in fact,
been attempted. Second, a supervisory routine can be called each
time a new combination has been entered or a certain dollar
volume exceeded. Third, short time periods of data entry can be
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reprocessed and inspected by a supervisor. Various limits can
also be set within the pointer chains for each accoun-t-section
number or account balance calculation to cause notification under
present conditions.
It is to be understood that the associated data component
need not be limited to numerals and, depending upon the criteria
associated with the chart of accounts, can be any combination of
numbers and/or letters and/or other symbols and a quantity. For
example, in double-entry bookkeeping, the associated data
component would be a dollar amount. However, in single-entry
bookkeeping, the associated data component could represent a
manufacturing component having an associated part number (item
number) and quantity.
In this process, the entire journal entry is the canonical
record of bookkeeping organization. In the prior art, an
individual line of the journal entry has been the canonical
record. The prior art relied upon the 'posting' process, a
sort-and-copy procedure, wherein all lines of the journal were
sorted and copied to ledger accounts.
This process effectively sorts the journal entries as whole
entities. Identical entry designs are added to a summary; and,
the sequential record of entry numbers added to each summary
provides a convenience means of locating individual entries in
the sequential log made at transaction time.
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Synonyms can occur and are eliminated by sorting the
individual record lines of the input ~ournal entry on the account
number field. The result of the sort is a traditional entry in
ascending account number sequence.
With respect to double-entry bookkeeping, the system begins
with the list or chart of accounts of all classifications of the
entity which are used in bookkeeping. However, in addition to
conventional double-entry bookkeeping, classifications pertaining
to physical quantities or other information to be tabulated may
be included. Only those classifications related to double-entry
bookkeeping need to be balanced by debit-equal-credit rules.
Single-entry items may be included in a double-entry journal
entry by reference to the chart of accounts. Those accounts
designated as double-entry will be tabulated in one group and the
group total debits and total credits tested for equality. Then
single-entry lines will be appended to the double-entry group
before the matrix selection and storage begins. The size of
combination-records will increase when single-entry data is
appended to double-entry data.
Although matrices have been noted in accounting literature
since Augustus De Morgan s 5th edition of Elements of Arithmetic
(1846), their usefulness has been obscured until Mattesich
("Accounting and Analytical Methods n 1964) integrated computer
capabilities into the discussion. Most, if not all, discussions
of the matrix have assumed existence of a conventional set of
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books and trial balances. Prior art matrix methods appear to
depend upon the substitution of two dimensions of a matrix for
the debit-and-credit of bookkeeping.
The present invention brings a new approach to accounting -
the aggregation of detail of the designs of journal entries.
First, the ability to audit is preserved through identification
of the specific transactions which were summarized. The journal
entry, complete with debit and credit, is the canonical record in
the present invention. Journal entries occur in varying sizes,
and require variable-length records. Previous accounting
database literature has emphasized the relational database model,
which normally uses fixed length records. The following
discussion, along with Figs. 1, 2 and 3, illustrate the problem
and solutions to matrix classification of journal entries.
The prior art of bookkeeping has included a list of
financial attributes known a-s a chart of accounts and the
division of each account identified in the chart into debit and
credit sections. Transactions are posted to each section of the
account and balances of each account are determined. The balance
of any account is the difference between any opening debit
balance plus debit transactions for the period and any opening
credit balance plus credit transactions for the period. The
difference is reported as the ending balance for whichever
section is a larger number.
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The prior literature of bookkeeping is almost entirely in
terms of ledger accounts, often described as T-accounts. The
journal, in the prior art, is a log of activity for-facility of
work and supervisory and audit tests of completeness.
Nevertheless, the journal entry is the ~atom" of double-entry
bookkeeping because the practice of debit equals credit begins
with each journal entry.
In Fig. 1, there is shown a schematic view of a lesser-known
prior art, the two-dimensional accounting matrix. The budget
model of a business firm (from Mattesich, 1964) has been
compressed into the five major classifications of accounts:
ASSETS, LIABILITIES, OWNERSHIP, REVENUES and EXPENSES. All
account titles (first letter only) appear along both dimensions
of a matrix 11 having an ~X~ axis 12 for Credits and a "Y~ axis
13 for Debits. A $500 sale of service, requiring entries of
debit ASSETS and credit REVENUES, would appear in a cell 14.
The matrix approach illustrated in Fig. 1 is envisioned to
contain a master of total journal entry for each design. All
journal entries which tas above) only debited assets and credited
revenues would be added to the master which is schematically
found in the cell 14 at the intersection of ASSETS (Debits) and
REVENUES (Credits).
The journal detail of bookkeeping does not match the logic
of a two-dimension matrix. Compound journal entries, those which
contain more than two elements, far outnumber simple entries and
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they cannot be expressed ill a two-dialerlsion summary. One can
assign multiple debits and credits within a two-dimension matrix
(through clearing of accounts, for instance), but the transaction
then becomes awkward to identify and audit. The aggregation of
journal detail requires multi-dimension matrices. Consider an
entry to cash, sales, and sales tax payable which occupies one
cell of a three-dimension matrix 21 as shown in Fig. 2. Not only
is a three-dimension matrix needed, but provision must also be
made for debit (D) and credit (C) within each account. The
problem becomes more complex with larger entries.
One component of the solution is to modify account numbers
within the computer to adjust for the debit and credit sections
of each ledger account or internally assign different account
numbers to the debit and credit sections of each ledger account.
In other words, the chart of accounts is internally doubled to
provide separate accounts for the debit and credit components of
each account. This adaptation of double-entry is transparent to
the accountant and allows the data structure to classify unique,
rather than paired, information for each account. At this point,
a particular account-debit or account-credit can be used to
define specific rows or cells along the axis of a matrix.
Although the matrix is theoretically larger, each design
occurrence of a journal entry is then unique.
Potentially, the matrix shown in Fig. 2 could hold up to one
thousand combinations, the total number of cells. In general, an
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n-account journal entry will require an n-dimension matrix witl
up to Mn values stored where "M' is two (in double-entry mode)
times the number of accounts in the ledger. However, there are
usually relatively few journal entry designs occurring in any
given matrix. This allows the use of a series of sparse
matrices, which require space to be allocated for only those
journal entries which actually exist. Each size of journal
entry, i.e., two-account, three-account, four-account, etc.,
requires a separate matrix.
The example shown in Fig. 2 shows a three-dimension matrix
which uniquely classifies the taxable sale discussed above. The
account designations previously used in Fig. 1 are abbreviated
such as "Ad n for ASSETS (Debits). The first element of the
journal entry, a debit to cash, is classified on an "X" axis 22,
the credit to Sales Tax Payable is shown on a "Y' axis 23, and
the credit to sales appears on a n Z n axis 24 resulting in an
intersection at a cell 25.
The matrix construction process involves the steps of:
(a~ reading a completed journal entry;
(b) determining the size of the journal entry in terms
of number of accounts posted;
(c) replacing the account numbers with internal
computer references;
(d) sorting the component lines into ascending
sequence to eliminate synonyms;
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(e) determining whe~her the journal entry design has
been previously processed;
(f) if not, creating and linking a record for that
design;
(g) adding the entry being read to totals for that
design;
(h) recording the entry number in a cumulative chain
for each design occurrence; and
(i) updating real time values of individual trial
balance accounts.
Although the stored journal entry summaries are abstractly
described as cells of multi-dimension matrices, implementation of
a sequence of records using the sparse matrix technique organizes
all possible combinations. Indices constructed from this
structure provide speedy retrieval.
Account numbers are sequential in the chart of accounts.
Therefore, any account number defines a location in that
sequence. The position of the account number thus defines the
specific cell, row, or other dimension necessary. The account
numbers are thus substituted for subscripts in matrix notation.
The usual notation for cells of matrices is X(i), Y(j),
Z(k), where X, Y, and Z are axes of the matrix and i, j, and k
are the locators along the axes. Figure 2 identifies a cell at X
(asset, debit), Y (liabilities, credit~, and Z (revenue, credit).
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The account numbers become the subscripts and are recorded in the
records represented in Figure 3.
The record which identifies the combination need not mention
X, Y, and Z -- these axes can be inferred from the length of the
record. The cell identifier selects the position of the cell
along each axis. The representation of specific cells of
matrices as variable-length combinations results in a
variable-length record which can be represented in two dimensions
- a 'flat file.' The result is a total of dollars for each
account and pointers (P in Fig. 3) to audit detail for each
unique design of journal entry. The matrix construction process
is oriented toward one journal entry. The tally of entries (N in
Fig. 3) which fit a summary is incremented with each entry. This
short sequence of processing is designed to coordinate with
real-time computer systems.
Fig. 3 displays the organization of summaries of journal
entries in the database. In Fig. 3, "ACCT" represents the
account-section which is the account number modified by debit or
credit, "$$" is the total dollars for the corresponding
account-section accumulated from all entries of identical design,
"N" is the number of journal entries summarized, and "P" is a
pointer to records of the journal entry detail formed as a chain
of entry numbers. Each horizontal row represents a database
design record for accumulating a different design. Although the
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term ~account number~ has been used above, any suitable account
indicator symbol can be utilized with the present invention.
The complete detail of smaller journals can be stored in
entry number sequence for retrieval of detail. At some point,
the volume of journal data of larger companies will require that
only the entry numbers may be available for retrieval. In those
larger firms, a search of files of the mainframe computer is
required to retrieve the details of the entries.
In Fig. 4, there is shown an apparatus for performing the
method with respect to accounting data in accordance with the
present invention. A source of information or data 31, such as a
computer process or a magnetic tape on a tape drive, provides a
listing of a chart of accounts and all of the journal entries to
be summarized. The source 31 is connected to an input of a
computer 32. The computer 32 reads the chart of accounts and
creates separate account-section numbers for the planned sections
of each account. The computer 32 is connected to a storage or
memory device 33 for storing the account-section numbers created
from the chart of accounts. Once the account-section numbers
have been stored, the computer 32 does not have to read the chart
of accounts each time additional related raw data is to be
processed. The programmer can identify the account-section
number from the account number modified by debit or credit
through a hashing technique. Hashing techniques are well known
in the art.
2121~18
- 26 -
The computer 32 reads the journal entries from the data
source 31. The computer 32 assigns one of the account-section
numbers to each debit and credit associated with a double-entry
account number in each journal entry. The assigned
account-sections are sorted into ascending account-section
numerical order for each journal entry. Now the computer 32 can
identify the design, the unique set of account-sections
associated with a journal entry. The sparse matrix size is
determined based upon the number of account-sections associated
with the journal entry. If the design is new, the appropriate
design record is created. If a journal entry of the same design
has been processed previously, the corresponding design record
already exists in a memory 34 connected to the computer 32. The
computer 32 adds the dollar or other amounts of each
account-section of the current journal entry into the associated
design record, adds one to the number of journal entries stored
in the record and updates the record pointer by storing the entry
number for the journal entry in a chain.
As stated above, if the memory capacity is available, the
journal entries can be stored, in a memory 35 connected to the
computer 32, in the order defined by the chain of each design
record or simply by entry number. Thus, the journal entries are
readily available to the computer 32 for inspection when desired.
If the memory capacity is inadequate, the entry numbers are
available to permit a search of the mainframe memory or the
~ ~ /
- 27 _ 21 21~5~ ~
backup tapes for the required journal entry records. The
computer 32 also has an output connected to an output device 36,
such as a video display terminal or a printer, for displaying
information such as the data and reports.
In addition, a chart of accounts with updated balances can
be produced on demand. Within double-entry, for each account,
the opening debit balance (from Fig. 5) is added to the total
debits as accumulated in the procedure outlined herein.
Similarly, the opening credit balance (From Fig. 5) is added to
total credits accumulated for the account. The two totals for
the account are compared and the net difference is placed into
the new balance, debit or credit, whichever is the greater of the
two totals. At the end of this procedure, the operator may
optionally reset the entire procedure by copying all materials
and all chains of journal entry numbers to a magnetic file
device. In such case, this -procedure, the equivalent of the
manual step of "closing the books,~ creates a chart of accounts
with present ending balances which become the opening balances to
begin a new period.
Fig. 10 illustrates the retained portion of the prior art,
an example of four journal entries, two of which are taxable
credit sales (#2 and #4) and two of which are non-taxable credit
sales (#l and #3). These two forms of journal entry also match
the matrix cells used in Figs. 1 (for a two-line entry) and 2
2S (for a three-line entry). Fig. 9 illustrates ~he prior art
~:~ 2 ~ ~1 g
- 2~ -
whereby the entries posted, i.e., the entries are disassembled
and the individual lines are copied and added to the
account-sections of a ledger account. The sparse matrix record
of Figs. 3, 8 and 11 accomplishes the accumulation of
account-section information previously performed in operations
related to Fig. 9 and, in addition, provides an organization of
the transactions.
Fig. S shows two columns for possible opening balances, one
for opening debit balance and one for opening credit balance.
The number of balance data columns determines the method of
bookkeeping to be used -- one balance column indicates that the
account is to be used in single-entry mode and two balance
columns indicates double-entry operation.
Fig. 8 illustrates the effect of transactions upon the
opening double-entry chart of accounts and its equality of debits
and credits. Fig. 5 illustrated the necessary information to
create account-sections and Fig. 8 illustrates the tabulation of
journal entry detail to new balances. Three accounts have been
selected, those which are included in the entries of Fig. 10.
Two summary records result from the entries in Fig. 10, they are
shown on the lower portion of Fig. 8. The dollars from the
journal entries are sorted to the same sequence in the sparse
record (Fig. 3) as the account-section numbers. The first
account-section number in each record is the debit to Accounts
Receivable. New debit balances are found by adding the opening
2121~18
- 29 -
balance and all the account-section numbers whicll debit Accounts
Receivable to a new total of debits to that account as diagrammed
in Fig. 8.
Fig. 11 illustrates a chain of pointers which link like
account-section numbers for the accumulation of totals from
account-section numbers created from the chart of accounts (Figs.
S and 8). The pointers identify specific matrix records which
contain the same account-section number, in Fig. 11, the debits
to Accounts Receivable. ACCT represents account-section numbers,
$S represents the total dollars to the corresponding account
accumulated from all entries of identical design, N represents
the number of journal entries accumulated, and P represents the
pointers.
The hardware required to implement the apparatus shown in
Fig. 4 is modest. The data source 31 can be a real-time computer
process or a magnetic tape reader for reading the backup tapes
from a mainframe accounting data processor. The data source 31
can also be each individual entry as verified by a computer in
real-time operation. The memories 33, 34 and 35 can be separate
memories or a large disk storage device interfaced with the
computer 32. A programming language with dynamic allocation
capabilities such as Pascal, Modula-2 and C can be utilized. The
apparatus shown in Fig. 4 also can be used to perform the method
according to the present invention on other types of data. In
general terms, the chart of accounts can be a list of item
2l2~
- 30 -
numbers and associated descriptions, the journal entries can be
data entries, and the account-section numbers can be item
indicators.
A flow diagram of the method according to the present
invention for performing double-entry bookkeeping on a plurality
of accounting journal entries is shown in Fig. 6. The computer
32 of Fig. 4 is programmed to perform a set of instructions
starting at a circle 41. The computer 32 enters an instruction
set 42 which causes it to read a chart of accounts, related to
the journal entries to be summarized, from the data source 31
into a list. The program then enters an instruction set 43 which
creates and stores double-entry account-section numbers by
doubling the list. This process is typically implemented by
adding separate designations for debit and credit to the account
numbers from the chart of accounts.
A schematic representation of a list of double-entry item
indicators for our accounting example is shown in Fig. 5. The
chart of accounts for the parental set of lines includes an
account number, A(1) through A(n), each with an associated
account description, DESCRIPTION (1) through DESCRIPTION (n) and
opening balances of account, either debit or credit. An
account-section number I(1) is assigned to a debit for account
number A(1) and a separate account-section number I(2) is
assigned to a credit for the same account number. Thus,
account-section numbers I(1) through I(2n) are created.
- 31 - 2 1 2 ~ 5 1 8
The program then enters an instruction set 44 wherein the
computer 32 reads a journal entry from the parental set in the
data source 3l and assigns corresponding account-section numbers
to each of the account numbers associated with this journal
entry. The program enters a decision point 45 which is designed
to detect any errors which may have been made in the reading of
the journal entry from the source. If an error is detected, the
program branches at "YES" to an instruction set 46 to list the
erroneous entry on the output device 36 shown in Fig. 4. If no
error is detected, the program branches at "NO" to an instruction
set 47 where it sorts the assigned account-section numbers,-along
with their associated dollar quantities or monetary fields, into
ascending numerical order.
As the next step in the program, an instruction set 48 is
entered wherein a specific multi-dimensional sparse matrix is
selected based upon the account sections posted in the journal
entry. The program then enters a decision point 49 to check
whether this combination of account-sections or design has had a
record created for any previous journal entries. If the
combination of account-sections does not exist, the program
branches from the decision point 49 at ~NO" to an instruction set
50. The program creates a new record and creates a chain for the
entry IDs of this combination. The program then enters an
instruction set 5l.
- 32 - 2 1 2 ~ 5 1 8
If the combination exists, the program branches from the
decision point 49 at "YES" to the instruction set Sl. The
program adds each of the dollar amounts associated with the
account-sections of the journal entry to any previous totals,
adds one to the tally, and stores the entry IDs in a chain. The
program then enters a decision point 52a which checks to
determine whether the end of the data available from the data
source 31 has been reached.
In Fig. 7, there is shown a schematic representation of a
chain of entry IDs, EN(l) through EN(n), identifying the original
journal entries, JOURNAL ENTRY (1) through JOURNAL ENTRY (n),
which share a unique design. Each of the records shown in Fig. 3
contains a pointer which begins a chain of journal entry
identifiers. The ~N n field in Fig. 3 contains the number of
journal records identified in the chain for each summary.
In Fig. 6, if all the journal entries have been read from
the data source 31, the program branches from the decision point
52a at "YES" to a second decision point 52b which checks to
determine whether a search and report operation is desired. If
no, the program branches from the decision point 52b to circle 54
and stops. If yes, the program begins a search and report
routine as discussed above. If additional journal entries are
available to be read, the program branches from the decision
point 52a at "NO" and returns to the instruction set 44 to read
2121S18
- 33 -
the next journal entry. After the search routine has been
completed, the program enters a circle 54 and stops.
In accordance with the provisions of the patent statutes,
the present invention has been described in what is considered to
represent its preferred embodiment. However, it should be noted
that the invention can be practiced otherwise than as
specifically illustrated and described without departing from its
spirit or scope. For example, while single-entry and
double-entry bookkeeping have been discussed herein, it is
anticipated that the invention could be used to perform
triple-entry bookkeeping as well as other variations.
