Algebraic Models For Accounting Systems - ISBN:9814287113

Algebraic Models For Accounting Systems

Date: 21 April 2011, 01:00

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This book describes the construction of algebraic models which represent the operations of the double entry accounting system. It gives a novel, comprehensive, proof based treatment of the topic, using such concepts from abstract algebra as automata, digraphs, monoids and quotient structures.
Summary: Interesting applied abstract algebra
Rating: 5
Very interesting! The authors show how to apply the abstract algebra to the double-entry accounting, connecting the purest pure math to the common bean-counting chores in Finance.
Abstract Algebra is articulate in the description of a formal system, based on a set of axioms and proved theorems. Here, the accounting system is defined as a formal system with 10 axioms.
It applies the following abstract algebra concepts:
1) Balance Vector: a single column vector of accounting elements, with total sum zero (balanced account). Debit has '-' sign and Credit '+'
2) DiGraph: Graph with vertices as accounts, edges as transaction.
3) Monoid
4) Automaton
5) homomorphism
6) Quotient group structure

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