Core Domain Concepts & Structural Topology

The structure of the Accounting & FMS domain is built around a strict hierarchy of accounts, immutable balance rules, and analytical dimensions that keep internal reporting flexible without polluting the primary ledger.

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1. Chart of Accounts Hierarchy Tree

The COA is organized as a strict tree where only the deepest level (leaf nodes) may receive postings:

Account Class (Root)
└── Main Group
    └── Sub-Group
        └── Detail / Posting Account  ← Only this level accepts journal lines

Level	Purpose
Account Class	Highest aggregation: Assets, Liabilities, Equity, Revenue, Expenses.
Main Group	Major financial grouping, e.g., Current Assets or Operating Expenses.
Sub-Group	More granular classification, e.g., Trade Receivables or Marketing Expenses.
Detail / Posting Account	The operational account used in journal entry lines.

Example Hierarchy

Account Class	Main Group	Sub-Group	Posting Account
Assets	Current Assets	Cash & Equivalents	Petty Cash
Assets	Current Assets	Trade Receivables	Domestic Customers
Liabilities	Current Liabilities	Trade Payables	Foreign Suppliers
Revenue	Operating Revenue	Product Sales	Local Sales
Expenses	Operating Expenses	Marketing	Digital Advertising

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2. Normal Balance Rules

The normal balance of an account indicates the side (debit or credit) on which the account increases:

Account Type	Normal Balance	Increase	Decrease
Assets	Debit	Debit	Credit
Expenses	Debit	Debit	Credit
Liabilities	Credit	Credit	Debit
Equity	Credit	Credit	Debit
Revenue	Credit	Credit	Debit

Fundamental Accounting Equation

$$ \text{Assets} = \text{Liabilities} + \text{Equity} $$

This equation is preserved at all times through the double-entry system. Every transaction maintains the equality by recording equal debit and credit amounts across affected accounts.

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3. Cost Centers & Analytical Accounting

Cost centers provide multi-dimensional analytical tagging without polluting the primary COA. Each journal entry line may carry one or more analytical dimensions:

Dimension	Example Values
Cost Center	Head Office, Factory A, Sales Region North
Project	Website Relaunch, ERP Migration
Department	Finance, Operations, Marketing

Analytical Tagging Rules

• Analytical tags are stored alongside journal lines and are used for internal allocation reports.
• Tags never alter the mathematical balance of the entry.
• A single journal line may carry multiple analytical dimensions, but the ledger balance remains governed solely by the COA account.
• Analytical slices must roll up to the same primary account balance; they cannot introduce shadow balances.