On Fri, 07 Jul 2000, Randolph Fritz wrote:
> On Fri, Jul 07, 2000 at 07:39:36AM -0500, Richard Wackerbarth wrote:
> > That is not COUNTING. That is MEASURING and PRICING.
> >
> > And by the time the transaction gets past the cash register, that measure
> > has been converted to a countable quantity.
>
> hunh? I mean, the last time I bought half a yard of fabric, the
> cutter wrote half a yard on a slip, computed a price, and I took that
> to the cash register.
Right. And the dry goods were either measured in units of (3 inches) or
greater or no effort was made to account for the individual amounts sold.
Particularly in a business such as dry goods, the amount that you actually
receive does not match the amount for which you were charged. The merchant
has figured this waste into the price he charges.
For such a merchant, it is far simpler to estimate the amount sold until he
takes a physical inventory of what remains and makes the adjustment necessary
to bring the inventory into balance.
> > Besides, "milk" and "sugar" are poor examples. They are seldom sold by
> > the gallon (pound) but rather by the "container". And the price of two
> > "half-gallon containers of milk" is not the same as that of "one
> > one-gallon container of milk". Please go to the store and purchase 1/3
> > gallon of milk for me.
>
> Only at the retail level--gnucash is supposed to work for business,
> too, no?
And, as Jon points out, that accounting is done in an even different set of
"units".
> > Not in my bank account. The balance is ALWAYS an exact multiple of one
> > cent. Even when I earn $1.5748 in interest each month, those fractional
> > cents NEVER accumulate to give me that additional cent.
>
> According to my banking consultant friend, the major US banks he
> worked for (Chase, Manufacturers Hanover, Citibank) did all their
> dollar computations
Computations are intermediate results which are never entered in the ledger.
> to four decimals of precision and rounded to two for output;
It is only this rounded result that gets posted to the ledger.
> he mentioned GM as one of the customers whose accounts
> this applied to. Has the practice changed, then?
I suspect that even GM received all charges and payments in cents without any
fractions.
> > Besides, if you can find a ledger that records hundreths of a cent, then
> > you simply denominate it in that "smallest countable unit".
> Perhaps then for money four decimal points of precision (if rounding
> after every computation is to the nearest 1/10,000th) is sufficient?
We should make no such assumption. Each ledger should be allowed to be
expressed in whatever units are used. However, for convenience, we should
offer the most common unit for the particular commodity as the default.
For example, before decimalization, it would have been 1/240 Pound Sterling.
I think that someone indicated that it is 0.05 Swiss Franc, etc.
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