-3

Frustrated with the current bookkeeping app I use, I've decided to start making my own with the intent to publish it. While I was on it, one thing that was immediately apparent is what happens to those "leftover" amounts when, say, $10 is divided by 3. It happens when a transaction gets split.

I did some research on the matter, but unfortunately haven't found any other answer aside from "do what you're accustomed to doing" or simply following the usual rounding rules (0.016 = 0.02; 0.034 = 0.03).

Are there any laws or regulations that specifically say what happens to those leftover amounts (or what they're even called)?

They're pretty small, but over tens of thousands of transactions, those $0.01 add up.

If specific context is needed, I'm from the Philippines

Edit: I'm asking about how calculations are done for finance and the considerations needed (legal or whatnot, if any), and not how to program it.

closed as off-topic by Dilip Sarwate, Rupert Morrish, quid, Nathan L, Dheer Apr 2 at 2:20

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Questions about accounting are off-topic unless they relate directly to personal finance or investing from an individual's perspective." – Rupert Morrish, quid, Dheer
If this question can be reworded to fit the rules in the help center, please edit the question.

  • 9
    In what context would you be dividing amounts in a bookkeeping application? – Hart CO Mar 31 at 16:02
  • 5
    I'm voting to close this question as off-topic because it is about a software product that the OP is wanting to develop, perhaps for sale, and not about an issue of personal finance. – Dilip Sarwate Mar 31 at 19:52
  • @DilipSarwate This is a question about personal accounting, which is on-topic. The OP’s reason for asking is irrelevant. – Ben Miller Mar 31 at 23:24
  • @DilipSarwate I'm asking about how calculations are done for finance and the considerations needed (legal or whatnot, if any), and not how to program it. I reckoned this SE would be the appropriate place to ask. The answer sounds like a programming answer though, but it gave a really important insight (offload that decision to the user). – Gene Dela Rosa Apr 1 at 3:31
  • 1
    You need to watch the movie "Office Space" :) – topshot Apr 2 at 12:09
8

You get to decide. If you want $100 to be split as $33.33, $33.33, $33.34, or $30, $30, $40, or whatever, it's your choice.

The bookkeeping app isn't (and shouldn't be) responsible for how you decide to split your invoices.

I wouldn't want my software to tell me that the extra cent must go to the third person, or that I must split a 3-item account as evenly as possible. I might actually want the $100 split as $10, $20, $70 because that's what the individual items cost. The accounting package wouldn't know, and so it shouldn't impose any rules about how entries are split.

  • 2
    I think there are actual accounting rules about how this works. – DJClayworth Mar 31 at 19:35
  • 6
    +1 For every personal accounting software program I've used, when you split a transaction you must manually enter how much goes to each split. It does not simply split the transaction evenly, as that is rarely what you want anyway. As a result, the software does not need to impose any rounding rules. – Ben Miller Apr 1 at 1:15
  • @DJClayworth Exactly. I'm looking to find out about it if there are any. – Gene Dela Rosa Apr 1 at 3:40

Not the answer you're looking for? Browse other questions tagged .