@pingleware/bestbooks-core
v1.2.3
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The core component for BestBooks Accounting Application Framework
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BestBooks Accounting Application Framework - CORE
BestBooks is an open source accounting application framework based on accounting terminology. Originally developed in Java to support multiple database because at the time the accounting applications had a close data model. Then migrated to PHP and as a WordPress plugin. BestBooks grew and matured as a WordPress plugin and became to cumbersome for a multiple site bookkeeping record system. A decision to rearchitect the framework with minimal web functionality interacting with a backend desktop-server component that can be placed behind a firewall.
NodeJS was chosen for the code base of the architecture because of one-code-base multiple platforms, as well as to breakup the functionality into node modules for easier maintenance with the base module beginning as the core.
The core module is a migration of the PHP classes from the WordPress plugin.
Overview of the components
| Module | Description | |--------|------------------------------------------------------------------------------| | core | The core which provides database connectivity and logging | | auditor | algorithmic auditing | | helpers | common methods used in accounting | | api | an API server interface | | reports | an XML based report generation without any third-party reporting frameworks | | export | permit exporting the records to other formats | | import | permit importing financial information from other formats | | mailer | a built SMTP mail server | | hrm | a human resource management integration | | tax | tax integration for federal, state and local taxes |
Application
The modules mentioned above define the BestBooks Accounting Application Framework that is used to create an accounting application at https://github.com/pingleware/bestbooks
Official User Guide
Avalable on amazon
Reporting
The reports module returns the report data in object-row format generate by SQL views.
Income Statement
There are two income statement reports, a regular and a geographic income statement. The Geographic
income statement shows the percentage of total revenu by location as defined in the location table. Here is a sample view,
Balance Sheet
Accounts Receivable Aging
Accounts Payable Aging
Statement of Change in Equity
Trial Balance
Test Driven Development
TDD will be utilized during the development and maintenance, using the mocha test framework. A good example of use cases can be found in each test. Execution delays have been added in the tests to compensate for latency in the database updates and response.
You can run the entire test suite using the command,
npm testor an individual test script by using the command,
npm test test/TEST_SCRIPT_FILENAME.test.jsmocha [spec..]
Run tests with Mocha
Commands
mocha inspect [spec..] Run tests with Mocha [default]
mocha init <path> create a client-side Mocha setup at <path>
Rules & Behavior
--allow-uncaught Allow uncaught errors to propagate [boolean]
-A, --async-only Require all tests to use a callback (async)
or return a Promise [boolean]
-b, --bail Abort ("bail") after first test failure
[boolean]
--check-leaks Check for global variable leaks [boolean]
--delay Delay initial execution of root suite
[boolean]
--dry-run Report tests without executing them[boolean]
--exit Force Mocha to quit after tests complete
[boolean]
--pass-on-failing-test-suite Not fail test run if tests were failed
[boolean] [default: false]
--fail-zero Fail test run if no test(s) encountered
[boolean]
--forbid-only Fail if exclusive test(s) encountered
[boolean]
--forbid-pending Fail if pending test(s) encountered[boolean]
--global, --globals List of allowed global variables [array]
-j, --jobs Number of concurrent jobs for --parallel;
use 1 to run in serial
[number] [default: (number of CPU cores - 1)]
-p, --parallel Run tests in parallel [boolean]
--retries Retry failed tests this many times [number]
-s, --slow Specify "slow" test threshold (in
milliseconds) [string] [default: 75]
-t, --timeout, --timeouts Specify test timeout threshold (in
milliseconds) [string] [default: 2000]
-u, --ui Specify user interface
[string] [default: "bdd"]
Reporting & Output
-c, --color, --colors Force-enable color output [boolean]
--diff Show diff on failure
[boolean] [default: true]
--full-trace Display full stack traces [boolean]
--inline-diffs Display actual/expected differences
inline within each string [boolean]
-R, --reporter Specify reporter to use
[string] [default: "spec"]
-O, --reporter-option, Reporter-specific options
--reporter-options (<k=v,[k1=v1,..]>) [array]
Configuration
--config Path to config file [string] [default: (nearest rc file)]
-n, --node-option Node or V8 option (no leading "--") [array]
--package Path to package.json for config [string]
File Handling
--extension File extension(s) to load
[array] [default: ["js","cjs","mjs"]]
--file Specify file(s) to be loaded prior to root suite
execution [array] [default: (none)]
--ignore, --exclude Ignore file(s) or glob pattern(s)
[array] [default: (none)]
--recursive Look for tests in subdirectories [boolean]
-r, --require Require module [array] [default: (none)]
-S, --sort Sort test files [boolean]
-w, --watch Watch files in the current working directory for
changes [boolean]
--watch-files List of paths or globs to watch [array]
--watch-ignore List of paths or globs to exclude from watching
[array] [default: ["node_modules",".git"]]
Test Filters
-f, --fgrep Only run tests containing this string [string]
-g, --grep Only run tests matching this string or regexp [string]
-i, --invert Inverts --grep and --fgrep matches [boolean]
Positional Arguments
spec One or more files, directories, or globs to test
[array] [default: ["test"]]
Other Options
-h, --help Show usage information & exit [boolean]
-V, --version Show version number & exit [boolean]
--list-interfaces List built-in user interfaces & exit [boolean]
--list-reporters List built-in reporters & exit [boolean]
Mocha Resources
Chat: https://discord.gg/KeDn2uXhER
GitHub: https://github.com/mochajs/mocha.git
Docs: https://mochajs.org/Package Naming Convention
The BestBooks packages prefix the name with @pingleware, for PressPage Entertainment Inc DBA PINGLEWARE which is the branded operations responsible for IT development.
Digital Currency Support Added
When Chairman Gensler testified at the House Financial Services Committee, he was ask a question to define Ether, see at https://www.coindesk.com/video/sec-chair-gensler-refuses-to-say-if-ether-is-a-security-during-house-hearing/, he could not define whether ether is a commodity or security, according to then Professor Gensler at MIT Blockchain course (https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall-2018/), Professor Gensler explains that both Bitcoin and Ether are not securiies but a unit of account.
Actually Ether like Bitcoin, like Cash is neither a commodity or security. Ether like Bitcoin and Cash and all other foreign currency denominations is a unit of account and is consider a liquid asset like Cash on the balance sheet.
Hence, Digital Currency is derived as a Cash asset for which Bitcoin and Ether is derived from DigitalCurrency class.
Logging is now available
The log file is named bestbooks.log and resides in the system directory identified as .bestbooks located in the home directory. On a Mac, to view dot directories, open finder and and press CTRL-CMD-. (the dot or period key). Toggle this key combination will toggle the view of the dot directories
There are three levels of logging
| Level | Description | Example | | ----- | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | warn | For warning, non-critical messages | 2024-04-06T09:42:55.628Z [WARN] {} | | info | For informational messages | 2024-04-06T09:42:55.586Z [INFO] INSERT OR IGNORE INTO ledger (company_id,office_id,account_name,account_code,txdate,note,credit,balance) VALUES (0,0,'Google Adsense Revenue',(SELECT code FROM accounts WHERE name='Google Adsense Revenue'),'2013-05-27','Service Adjustment','71.12',(SELECT IIF(SUM(debit)-SUM(credit),SUM(debit)-SUM(credit)+71.12,71.12) FROM ledger WHERE account_name='Google Adsense Revenue')); | | error | For critical messages | 2024-04-06T09:42:55.628Z [ERROR] {} | | cat | For consolidated audit trail | 2024-04-06T09:42:55.628Z [CAT] {} | | mail | For mail messages | 2024-04-06T09:42:55.628Z [MAIL] {} |
GAAP Compliance
Creating a chart of accounts in accordance with GAAP is the first step towards GAAP complaince and including entries for FOREX trading to create operational budgets as well as digital currencies
Chart of Accounts
1000 - Assets
1100 - Current Assets
1110 - Cash and Cash Equivalents
1111 - Petty Cash
1112 - Checking Account
1113 - Savings Account
1114 - Money Market Account
1115 - FOREX Trading Accounts
- 1115.1 - FOREX Account - RESERVES
- 1115.2 - FOREX Account - OPERATIONS
1120 - Digital Currencies
- 1121 - Bitcoin
- 1122 - Ether
- 1123 - Other Digital Currencies
1130 - Accounts Receivable
- 1131 - Accounts Receivable - Trade
- 1132 - Allowance for Doubtful Accounts
1140 - Inventory
- 1141 - Raw Materials Inventory
- 1142 - Work-in-Progress Inventory
- 1143 - Finished Goods Inventory
1150 - Prepaid Expenses
- 1151 - Prepaid Insurance
- 1152 - Prepaid Rent
1160 - Other Current Assets
- 1161 - Short-term Investments
- 1162 - Notes Receivable (due within one year)
1200 - Non-Current Assets
1210 - Property, Plant, and Equipment (PP&E)
- 1211 - Land
- 1212 - Buildings
- 1213 - Machinery and Equipment
- 1214 - Furniture and Fixtures
- 1215 - Accumulated Depreciation
1220 - Intangible Assets
- 1221 - Goodwill
- 1222 - Patents
- 1223 - Trademarks
- 1224 - Accumulated Amortization
1230 - Long-term Investments
1240 - Other Non-Current Assets
1242 - Long-term FOREX Investments
- 1243 - Long-term Digital Currency Investments
1250 - Other Non-Current Assets
- 1251 - Long-term Notes Receivable
2000 - Liabilities
2100 - Current Liabilities
2110 - Accounts Payable
- 2111 - Accounts Payable - Trade
- 2112 - Accounts Payable - Other
2120 - Short-term Debt
- 2121 - Short-term Loans Payable
- 2122 - Current Portion of Long-term Debt
2130 - Accrued Liabilities
- 2131 - Accrued Salaries and Wages
- 2132 - Accrued Interest Payable
- 2133 - Accrued Taxes Payable
2140 - Deferred Revenue (current)
- 2145 - Unrealized FOREX Gains
- 2146 - Unrealized FOREX Losses
2150 - Other Current Liabilities
- 2151 - Customer Deposits
2200 - Non-Current Liabilities
- 2210 - Long-term Debt
- 2211 - Bonds Payable
- 2212 - Long-term Loans Payable
- 2220 - Deferred Revenue (non-current)
- 2230 - Other Non-Current Liabilities
- 2231 - Deferred Tax Liabilities
- 2210 - Long-term Debt
3000 - Equity
- 3100 - Shareholders' Equity
- 3110 - Common Stock
- 3120 - Preferred Stock
- 3130 - Additional Paid-in Capital
- 3140 - Retained Earnings
- 3150 - Treasury Stock
- 3160 - Accumulated Other Comprehensive Income
- 3161 - Cumulative Translation Adjustments
4000 - Revenue
4100 - Sales Revenue
- 4110 - Product Sales
- 4120 - Service Sales
4200 - Other Revenue
- 4210 - Interest Income
- 4220 - Dividend Income
- 4230 - Rental Income
- 4240 - Gain on Sale of Assets
- 4250 - FOREX Trading Gains
- 4251 - Realized FOREX Gains
- 4252 - Unrealized FOREX Gains
- 4260 - Digital Currency Gains
- 4261 - Realized Digital Currency Gains
- 4262 - Unrealized Digital Currency Gains
5000 - Cost of Goods Sold (COGS)
- 5100 - COGS
- 5110 - Direct Materials
- 5120 - Direct Labor
- 5130 - Manufacturing Overhead
6000 - Operating Expenses
- 6100 - Selling Expenses
- 6110 - Advertising Expense
- 6120 - Sales Commissions
- 6130 - Travel Expense
- 6200 - General and Administrative Expenses
- 6210 - Salaries and Wages
- 6220 - Rent Expense
- 6230 - Utilities Expense
- 6240 - Insurance Expense
- 6250 - Depreciation Expense
- 6260 - Amortization Expense
- 6270 - Office Supplies Expense
7000 - Other Expenses
- 7300 - Other Expenses
- 7100 - Interest Expense
- 7200 - Tax Expenses
- 7300 - Other Expenses
- 7310 - Loss on Sale of Assets
- 7320 - FOREX Trading Losses
- 7321 - Realized FOREX Losses
- 7322 - Unrealized FOREX Losses
- 7330 - Digital Currency Losses
- 7331 - Realized Digital Currency Losses
- 7332 - Unrealized Digital Currency Losses
About the Disclousres table
The Disclosures table holds crucial financial information that must comply with regulatory and accounting standards. It is designed to track the company's public disclosures related to financial statements, which are required for audits, SEC filings, and general financial transparency.
Use Cases for the Disclosures Table
Tracking Financial Disclosures Compliance
The primary use case for theDisclosurestable is to ensure that financial disclosures (such as income statements, balance sheets, and cash flow statements) are compliant with applicable standards like GAAP, GAAS, and SEC regulations.Example:
The company must disclose the financial health of the company by publishing a Cash Flow Statement. The table tracks whether the disclosure was made on time, whether it's compliant, and if any issues were found (like missing notes or improper methodology).Disclosure Record:
{ "name": "Cash Flow Statement", "description": "Cash Flow Statement for FY 2023", "is_compliant": 1, "date_disclosed": "2023-01-15", "compliance_note": "Compliant" }Monitoring Non-Compliant Disclosures
Identifying and monitoring disclosures that have failed to comply with the necessary accounting or regulatory standards is critical for audits and assessments.Example:
If an Income Statement lacks proper notes on revenue recognition, the audit team may flag this as non-compliant, and the company will be required to correct it before final approval.Non-compliant Disclosure Record:
{ "name": "Income Statement", "description": "Income Statement for FY 2023", "is_compliant": 0, "date_disclosed": "2023-03-01", "compliance_note": "Methodology not disclosed" }Reporting on Disclosure History
TheDisclosurestable can provide a historical record of all financial statements and other disclosures the company has made over a period of time. This helps auditors and regulatory bodies to review the company’s compliance with financial reporting over time.Example:
The audit team retrieves all financial disclosures made by the company over the last five years to confirm continuous compliance.Historical Disclosure Records:
[ { "name": "Balance Sheet", "description": "Balance Sheet for FY 2022", "is_compliant": 1, "date_disclosed": "2022-03-01", "compliance_note": "Compliant" }, { "name": "Income Statement", "description": "Income Statement for FY 2022", "is_compliant": 1, "date_disclosed": "2022-03-01", "compliance_note": "Compliant" } ]Generating Compliance Reports for Audits
The disclosures data can be used to generate detailed reports for external audits, including management and public audit reports. These reports indicate whether the company is in compliance with disclosure requirements, pinpointing areas of improvement.Example:
A Management Audit Report is generated, summarizing which disclosures were compliant and which required corrective actions.Audit Report Example:
{ "total_disclosures": 10, "compliant_disclosures": 9, "non_compliant_disclosures": 1, "non_compliant_details": [ { "disclosure": "Income Statement", "compliance_note": "Methodology not disclosed" } ] }Ensuring Timeliness of Disclosures
TheDisclosurestable allows tracking the timeliness of financial disclosures, which is important for SEC reporting deadlines. Late filings can lead to penalties or regulatory scrutiny.Example:
The Balance Sheet for Q2 is supposed to be disclosed by the end of the quarter. If it is delayed beyond the disclosure deadline, the company may face penalties.Late Disclosure Record:
{ "name": "Balance Sheet", "description": "Balance Sheet for Q2 2023", "is_compliant": 0, "date_disclosed": "2023-07-15", "compliance_note": "Late submission" }Tracking Disclosure Corrections
Companies may need to revise their disclosures if auditors or regulators find errors. Tracking when disclosures were corrected helps maintain an audit trail.Example:
The Cash Flow Statement initially failed to disclose a cash outflow correctly. After a revision, it was marked as compliant.Corrected Disclosure Record:
{ "name": "Cash Flow Statement", "description": "Revised Cash Flow Statement for FY 2023", "is_compliant": 1, "date_disclosed": "2023-04-01", "compliance_note": "Revised disclosure" }Tracking Key Financial Metrics and Their Presentation
Ensure that key financial metrics such as earnings per share (EPS), total assets, liabilities, and cash flows are properly disclosed and are consistent across the disclosures.Example:
The company's Equity Statement must include the proper breakdown of share transactions and equity changes. If some key equity metrics are omitted, it would be considered non-compliant.Equity Statement Disclosure:
{ "name": "Equity Statement", "description": "Equity Statement for FY 2023", "is_compliant": 1, "date_disclosed": "2023-01-15", "compliance_note": "Includes EPS, dividends, and other changes in equity" }Ensuring Compliance with Regulatory Changes
As regulations evolve, the company must ensure that disclosures are updated to reflect new accounting standards or regulatory requirements.Example:
New SEC regulations may require additional disclosure of Related Party Transactions. TheDisclosurestable tracks whether this new requirement has been implemented.Related Party Transaction Disclosure:
{ "name": "Related Party Transactions", "description": "Disclosures of transactions with related parties for FY 2023", "is_compliant": 1, "date_disclosed": "2023-01-15", "compliance_note": "Compliant with new SEC regulations" }Support for Public Disclosure Reporting
TheDisclosurestable is also useful for generating Public Disclosure Audit Reports, which summarize the financial information made available to investors and the public, ensuring transparency and accountability.Example:
A Public Disclosure Report is generated to confirm that all mandatory filings have been made and publicly disclosed by the company in accordance with SEC regulations.Public Disclosure Report Example:
{ "total_disclosures": 12, "compliant_disclosures": 11, "non_compliant_disclosures": 1, "non_compliant_details": [ { "disclosure": "Income Statement", "compliance_note": "Disclosure methodology missing" } ], "date": "2023-12-31" }
Summary of Use Cases
- Tracking Financial Disclosures Compliance (e.g., Balance Sheet, Income Statement)
- Monitoring Non-Compliant Disclosures (e.g., flagging incomplete/missing disclosures)
- Reporting on Disclosure History (e.g., view historical disclosure records)
- Generating Compliance Reports for Audits (e.g., create audit reports)
- Ensuring Timeliness of Disclosures (e.g., track on-time vs late disclosures)
- Tracking Disclosure Corrections (e.g., track revisions to disclosures)
- Tracking Key Financial Metrics (e.g., EPS, liabilities, cash flows)
- Ensuring Compliance with Regulatory Changes (e.g., adaptation to new regulations)
- Support for Public Disclosure Reporting (e.g., ensure investor disclosures are accurate)
These use cases are essential for maintaining financial transparency, ensuring regulatory compliance, and assisting in internal and external audits.
Conservatism Principle
The Conservatism Principle should be applied and potentially updated when a ledger transaction is added, based on the type and certainty of the transaction. The principle specifically requires that:
Expenses and Liabilities:
These are to be recorded as soon as they are probable, even if the exact amount is uncertain. Therefore, when any transaction classified as an expense or liability is added to the ledger, it should be immediately flagged as "conservative." Revenues and Assets:
These should only be recorded when they are certain. When a transaction classified as revenue or an asset is added, it should be flagged as "non-conservative" unless there is a high level of certainty regarding the transaction. In practical terms, when a new transaction is added to the ledger, the system should evaluate the nature of the transaction and apply or update the conservatism flag based on this logic.
When to Update Conservatism in the Ledger Expenses and Liabilities should be updated and flagged immediately when they are recorded in the ledger (e.g., estimated costs, potential legal settlements, contingent liabilities).
Revenues and Assets should be deferred or marked as uncertain until they are realized or certain (e.g., expected future sales, unrealized asset gains).
Process to Update Conservatism Principle on Ledger Transactions Evaluate Transaction Type:
If the transaction is an expense or liability, the conservatism principle should immediately flag it as conservative. If the transaction is revenue or asset, it should be flagged as non-conservative until certainty is achieved (i.e., confirmation of actual receipt or asset ownership). Update the Transaction Record:
The transaction should be inserted into the ledger with the corresponding conservatism flag (is_conservative) based on the evaluation.
Going Concern Assumption
The Going Concern Assumption in accounting is the assumption that a company will continue to operate in the foreseeable future and not be forced to halt its operations or liquidate its assets. In an audit or financial assessment, this principle is crucial because it affects the valuation of assets, liabilities, and other financial items.
How to Implement the Going Concern Assumption
The logic for this can be applied by monitoring specific financial indicators that could suggest that the company may no longer continue as a going concern. These indicators might include:
- Declining revenues
- High debt levels
- Negative cash flows
- Inability to meet obligations
Key Logic Explained
- Adding Financial Indicators: Each financial indicator (like revenue, debt, or cash flow) is inserted into the financial_indicators table. Each entry has a value, a predefined threshold, and a status:
- If the value exceeds the threshold by a critical amount (e.g., 1.5 times), the status is marked as "critical."
- If the value exceeds the threshold but is not critical, it is marked as "warning."
- If the value is within normal range, it is marked as "normal."
- Evaluating the Going Concern Assumption: The evaluateGoingConcern() function checks for any critical financial indicators. If one or more indicators are critical, the company is flagged as not a going concern. Otherwise, it is considered a going concern.
Financial Indicators:
[
{
"id": 1,
"indicator_name": "debt_to_equity_ratio",
"value": 4.5,
"threshold": 3.0,
"status": "critical",
"recorded_at": "2024-10-12"
},
{
"id": 2,
"indicator_name": "net_profit_margin",
"value": 0.1,
"threshold": 0.05,
"status": "normal",
"recorded_at": "2024-10-12"
}
]Evaluate the Going Concern Assumption
{
"going_concern": true,
"message": "Company is operating as a going concern."
}End of Life Doctrine
When a piece of software is useful there should never be an end-of-life doctrine. The goal of this software is to achieve immortality ;). When this software has reached that stage, this project may appear abandon but the opposit is true. This software (in release not alpha, beta or gamma) has achieve that state where maintenance is no longer required.
Patrick O. Ingle