From 131c64f6352c6d33affa4e7f9b9606ba2fd9aa4f Mon Sep 17 00:00:00 2001 From: Nicholas Karlson Date: Wed, 14 Jan 2026 03:39:08 -0800 Subject: [PATCH] =?UTF-8?q?Docs:=20Add=20workbook=20running=20case=20story?= =?UTF-8?q?=20(Ch01=E2=80=93Ch04)?= MIME-Version: 1.0 Content-Type: text/plain; charset=UTF-8 Content-Transfer-Encoding: 8bit --- .../workbook/ch01_equation_transaction.rst | 32 +++++++++++++++++++ docs/source/workbook/ch01_startup.rst | 19 +++++++++++ .../ch02_journal_to_trial_balance.rst | 22 +++++++++++++ .../workbook/ch03_adjusting_entries.rst | 19 +++++++++-- .../workbook/ch04_closing_and_post_close.rst | 16 +++++++++- docs/source/workbook/index.rst | 15 +++++++++ 6 files changed, 120 insertions(+), 3 deletions(-) diff --git a/docs/source/workbook/ch01_equation_transaction.rst b/docs/source/workbook/ch01_equation_transaction.rst index 82ba7eb..b43d30d 100644 --- a/docs/source/workbook/ch01_equation_transaction.rst +++ b/docs/source/workbook/ch01_equation_transaction.rst @@ -1,6 +1,38 @@ Ch01B — Accounting equation + transactions ============================================ +.. admonition:: Same story, different lens + + We’re still working with **Harborview Bike Repair** in **January 2026**. + This chapter uses the same four startup events from :doc:`ch01_startup`, but the goal is + to practice the *reasoning* behind each entry: + + 1) What changed in the accounting equation? + 2) What debit/credit lines express that change? + +Equation → journal (side-by-side) +--------------------------------- + +.. list-table:: + :header-rows: 1 + :widths: 28 36 36 + + * - Business event + - Accounting equation view + - Journal entry view + * - Owner invests $10,000 cash + - Assets **↑** (Cash); Equity **↑** (Owner Capital) + - Dr ``Assets:Cash`` 10,000 / Cr ``Equity:OwnerCapital`` 10,000 + * - Cash customer pays $500 + - Assets **↑** (Cash); Equity **↑** via Revenue + - Dr ``Assets:Cash`` 500 / Cr ``Revenue:ServiceRevenue`` 500 + * - Buy $200 supplies (cash) + - Assets **↓** (Cash); Equity **↓** via Expense + - Dr ``Expenses:Supplies`` 200 / Cr ``Assets:Cash`` 200 + * - Owner draws $100 + - Assets **↓** (Cash); Equity **↓** (Draws/Dividends) + - Dr ``Equity:Dividends`` 100 / Cr ``Assets:Cash`` 100 + What you'll learn ----------------- - Describe how each business event changes A / L / E diff --git a/docs/source/workbook/ch01_startup.rst b/docs/source/workbook/ch01_startup.rst index 9ea4213..d22b6d2 100644 --- a/docs/source/workbook/ch01_startup.rst +++ b/docs/source/workbook/ch01_startup.rst @@ -1,6 +1,25 @@ Ch01A — Startup ================= +.. admonition:: Running case (Jan 2026): Harborview Bike Repair + + You’re the bookkeeper for a tiny one-person service business that’s just opened its doors. + The goal of Ch01–Ch04 is to walk the business through a complete accounting cycle for its + first month. + + In this chapter we start with a **micro-dataset** (only four transactions) so you can + learn the LedgerLoom workflow without juggling a big chart of accounts. + + The four Ch01 transactions are: + + - **T1 (Jan 2):** Owner invests **$10,000** cash to start the business. + - **T2 (Jan 5):** First cash customer pays **$500** for service. + - **T3 (Jan 6):** Buy **$200** of consumable supplies (expensed immediately in Ch01). + - **T4 (Jan 20):** Owner draw of **$100** for personal use. + + In Chapter 2 we expand the same business into a fuller month (supplies as an asset, + equipment, A/R, A/P, rent) so the trial balance becomes “real.” + What you'll learn ----------------- - Install LedgerLoom from PyPI (student workflow) diff --git a/docs/source/workbook/ch02_journal_to_trial_balance.rst b/docs/source/workbook/ch02_journal_to_trial_balance.rst index a6c3b79..0fa6600 100644 --- a/docs/source/workbook/ch02_journal_to_trial_balance.rst +++ b/docs/source/workbook/ch02_journal_to_trial_balance.rst @@ -1,6 +1,28 @@ Ch02 — Journal to trial balance ================================= +.. admonition:: Running case (Jan 2026): a “real” first month + + **Harborview Bike Repair** has moved past the first-day setup. + In this chapter you record a fuller set of January transactions that make a trial balance + feel like something you’d see in an actual small business: + + - cash + invoice (A/R) revenue + - supplies kept on hand (an asset, later expensed) + - equipment purchased on account (A/P) + - routine operating costs (rent) + + If you ever feel lost, read each ``entry_id`` as a short business sentence: + + - **T001:** owner funds the business with cash + - **T002:** buy supplies with cash + - **T003:** buy equipment on account (creates Accounts Payable) + - **T004:** cash service revenue + - **T005:** service revenue on account (creates Accounts Receivable) + - **T006:** pay rent + - **T007:** pay down Accounts Payable + - **T008:** collect part of Accounts Receivable + What you'll learn ----------------- - Write balanced journal entries in ``transactions.csv`` diff --git a/docs/source/workbook/ch03_adjusting_entries.rst b/docs/source/workbook/ch03_adjusting_entries.rst index a44cdc7..0fa083b 100644 --- a/docs/source/workbook/ch03_adjusting_entries.rst +++ b/docs/source/workbook/ch03_adjusting_entries.rst @@ -1,6 +1,20 @@ Ch03 — Adjusting entries ========================== +.. admonition:: Month-end reality check (Jan 31, 2026) + + At the end of January, **Harborview Bike Repair** does a quick month-end close. + Cash transactions alone don’t capture what really happened during the period, so we add a + few **adjusting entries** that match revenue/expenses to January. + + The canonical adjustments in this chapter are small on purpose, but they mirror real + bookkeeping decisions: + + - **A001 (Supplies used):** a quick count shows $150 of supplies were consumed during January. + - **A002 (Depreciation):** one month of wear on equipment ($50). + - **A003 (Utilities accrued):** the utility bill hasn’t been paid yet, but $75 was incurred. + - **A004 (Revenue accrued):** $200 of service was earned but not yet billed/collected. + What you'll learn ----------------- - Explain why adjustments exist (accrual vs. cash) @@ -20,8 +34,9 @@ Key accounting terms - **Prepaid expense:** cash paid first, expense recognized later (asset → expense over time). - **Unearned revenue:** cash received first, revenue recognized later (liability → revenue over time). -- **Depreciation:** allocating the cost of a long-lived asset over time (expense) using a **contra-asset** - like ``Assets:AccumulatedDepreciation``. +- **Depreciation:** allocating the cost of a long-lived asset over time (expense). + Many systems use a separate **contra-asset** (Accumulated Depreciation), but this workbook keeps the + chart of accounts small and credits ``Assets:Equipment`` directly. What to do in your spreadsheet ------------------------------ diff --git a/docs/source/workbook/ch04_closing_and_post_close.rst b/docs/source/workbook/ch04_closing_and_post_close.rst index 445409d..1289da2 100644 --- a/docs/source/workbook/ch04_closing_and_post_close.rst +++ b/docs/source/workbook/ch04_closing_and_post_close.rst @@ -1,6 +1,18 @@ Ch04 — Closing + post-close trial balance =========================================== +.. admonition:: Closing the month (Jan 2026) + + You’ve recorded January’s transactions and adjustments for **Harborview Bike Repair**. + Now we do the final “reset” step of the accounting cycle: + + - **Temporary accounts** (Revenue / Expenses / Draws) get closed to zero. + - The period’s result (net income or net loss) is transferred into + ``Equity:RetainedEarnings``. + + In workbook mode, LedgerLoom generates the closing lines for you from the **adjusted trial + balance** so you can compare your spreadsheet method against a deterministic reference. + What you'll learn ----------------- - Explain what “closing” means and why we do it @@ -15,7 +27,9 @@ Key accounting terms - **Closing entries:** entries that move the period’s net income into equity and bring temporary accounts to zero. - **Post-close trial balance:** the trial balance **after** closing; it should include *only* permanent accounts. - **Income summary:** some courses use an intermediate “Income Summary” account. LedgerLoom can generate closing - lines directly from the adjusted trial balance; the destination equity account is course-dependent. + lines either through Income Summary *or* directly. + In this workbook we keep it simple: closing entries go straight to ``Equity:RetainedEarnings`` (no Income Summary + account required). What to do in your spreadsheet ------------------------------ diff --git a/docs/source/workbook/index.rst b/docs/source/workbook/index.rst index 5ceb431..2b9e828 100644 --- a/docs/source/workbook/index.rst +++ b/docs/source/workbook/index.rst @@ -10,6 +10,21 @@ This workbook teaches *intro* financial accounting using a simple hybrid workflo 2. Verify your work with LedgerLoom (strict, deterministic). 3. Reconcile any differences until they match (proof, not vibes). +Our running case (the “business behind the numbers”) +---------------------------------------------------- + +Ch01–Ch04 follow a tiny service business — **Harborview Bike Repair** — through its first month +of operations (**January 2026**). + +You’ll see a realistic mix of events: owner funding, supplies and equipment purchases, +cash + invoice revenue (A/R), payables (A/P), month-end adjustments, and finally closing the +books into ``Equity:RetainedEarnings``. + +The numbers are intentionally small and clean so you can focus on *reasoning*: + +- No sales tax/VAT/GST, no payroll, no bank fees. +- A minimal chart of accounts (we add complexity only when the chapter needs it). + Start here ----------