Equity statement, often referred to as Statement of Retained Earnings in U.S. GAAP, details the change in owners' equity over an accounting period by presenting the movement in reserves comprising the shareholders' equity. This paper reviews database design in the context of an accounting example and illustrates the power of the Structured Query Language (SQL) with several examples. It’s natural, that the expenses account entry is related to some costs centre. To achieve this purpose two learning, Structured Query Language (SQL) is widely used to operate Relational Databases (RDBs), and to operate an RDB with SQL, an application called an SQL Client is used. Neither balance sheet nor income statement has a notion of debit/credit, only a plain number. Any of the fields can be changed without affecting the identity of the document. How Do I Design a Database All of the accounts should be related to some lines of either balance sheet of income statement. We will discuss “person” and “cost centre” entities in detail in the next article. Therefore, debit balance change should be subtracted from the net income. You can easily search or filter the list to find any account information. Hence, the solution is to add a new data entity (database table) – cash_flow_adjustments – that has pretty much the same fields as ledger_entries: id, account id, entry type (debit/credit) and amount. Domain constraint, Key constraint, Entity integrity constraint, and Referential integrity constraint are the four different … However, going indirect direct way requires that the chart of accounts be structured in specific order to collect different types of information, e.g., all payable accounts (VAT payable, accounts payable, etc.) The differences means that the income statement and balance sheet structures should be stored separately and related to the accounts subject to the following rules: The next thing to consider is the method how balance sheet and income statement values are fetched: All those values are available from account level trial balance query that we used for general ledger performance benchmarking. However, that would impose considerable amount of work on an accountant – he would have to classify every cash transaction. Each equity statement column represent a type of the equity. In contrast, SQL has remained constant and stable with additions or modifications occurring every few years. The reason behind it is the difference between concepts “transaction” and “(source) document”. If we handle the equity’s increase as described above, we will invalidate the statement by showing equity’s increase (a) “out of nowhere” and (b) having nothing to do with cash. Therefore, we have a much more complex CASE. This article, along with any associated source code and files, is licensed under The Code Project Open License (CPOL), General News Suggestion Question Bug Answer Joke Praise Rant Admin. In the previous article, we discussed general financial accounting application database design concepts and defined a very basic roadmap for the whole database like: defining the business domain, basic requirements to be met, primary key usage policy, … Programing is my hobby. Simple invoice made by a VAT payer has three ledger entries: credits a revenues account by invoice amount (total price), credits a VAT payable account by VAT amount and debits accounts receivable by the sum of invoice amount and VAT amount. For that purpose, I created test databases for each of the schemas with 1 million transactions and 2,5 million ledger entries. We only need a few changes to make it fully functional, as an accountant would expect to: It is obvious that an accountant will want to filter transactions and ledger entries (accounts turnover) by a person or a costs centre. Database Design Document: Free Data Model Template. As namely the subquery is doing heavy lifting, executing separate queries for account level balance and balance sheet, income statement and cash flow statement essentially triples the database workload for the very similar data. Next, we need to deal with the aggregate lines that should sum the values of their child lines. 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