wanderbooks/docs/glossary.md

Glossary

For agents (and humans) new to accounting. The engine's naming follows these definitions exactly.

• Debit / Credit — The two sides of every journal line. Not "good" and "bad": debit = left, credit = right. What they do depends on the account type (see normal balance).
• Normal balance — The side that increases an account. Assets and expenses are debit-normal (a debit increases them); liabilities, equity, and revenue are credit-normal. AccountType::normal_side().
• Chart of accounts — The registry of all accounts, organized by code (e.g. 1000 Cash, 6000 Rent Expense). Five types, no more.
• Journal entry — A set of balanced lines with a date and description. The atomic unit: it posts whole or not at all.
• Ledger — The books: the chart plus the append-only log of posted entries. (In this codebase Ledger is also the command surface.)
• Posting — Validating a draft entry and appending it to the log. One-way.
• Trial balance — A listing of every account's debit or credit balance. Total debits must equal total credits; if they don't, the books are broken.
• Balance sheet — Assets = Liabilities + Equity, at a point in time.
• Profit & loss (income statement) — Revenue − Expenses = Net income, over a period.
• Reversing entry — An entry that exactly undoes a posted entry (same lines, sides flipped), linked to the original. The correction mechanism.
• Placeholder account — A header in the chart (e.g. "Current Assets") that organizes other accounts but takes no postings itself.
• Closing the books — Period-end ritual: move revenue/expense balances into retained earnings so the new period starts clean. (Future: R-FUTURE-2.)
• Current earnings — Net income to date on an unclosed book. We fold it into equity so the accounting equation holds before close.