Accounting model
AI Accounting is a real double-entry general ledger. This page explains the core model so the API and reports make sense.
The chart of accounts
Every organization has a chart of accounts — the list of buckets money moves between. Each account has a number, a name, and a type:
| Type | Normal balance | Examples |
|---|---|---|
asset | Debit | Cash, Accounts Receivable, Equipment |
liability | Credit | Accounts Payable, Loans, Taxes Payable |
equity | Credit | Owner's Equity, Retained Earnings |
revenue | Credit | Sales, Consulting Income |
expense | Debit | Rent, Salaries, Software |
You can build the chart yourself with the Accounts API, or seed a standard ~40-account chart (numbered 1000–9000) in one call.
Debits and credits
Every amount is either a debit or a credit. Whether that increases or decreases an account depends on its type (the "normal balance" column above):
- Debits increase assets and expenses; credits decrease them.
- Credits increase liabilities, equity, and revenue; debits decrease them.
You don't have to memorize this to use the API — you just supply debit or
credit amounts per line and the engine enforces the rules.
Balanced entries
The defining rule of double-entry: for every transaction, total debits equal total credits. A journal entry is the unit that records one transaction. Each entry has two or more lines, and the engine rejects any entry that doesn't balance.
Example
Receiving $500 cash for consulting: debit Cash $500 (an asset goes up), credit Consulting Income $500 (revenue goes up). Debits = credits = $500.
Where balances come from
Account balances and every financial report are computed from posted journal entries — not stored and mutated in place. That makes the ledger auditable: the audit trail is the source of truth, and reports are a deterministic view over it.
Next
- Journal entries — the draft → post → reverse lifecycle.
- Reports — how the five statements are derived.