Weird Accounting

[Thorin]

Read this blogpost carefully: http://marksaccjokes.blogspot.com/2009/11/is-this-how-accounting-works-and-how-we.html, then tell me if you know where the money went.

[Darren Dirt]

kinda funny. but the 2nd comment is correct, the hotel proprietor is the net "loser", because he's the only one who allowed a debt to be paid with the bill, but neither (a) still possesses that note, nor (b) used that note to pay off a debt he still was owing. It's almost like he accepted that last payment then donated the note to charity.

[Tom]

kinda funny. but the 2nd comment is correct, the hotel proprietor is the net "loser", because he's the only one who allowed a debt to be paid with the bill, but neither (a) still possesses that note, nor (b) used that note to pay off a debt he still was owing. It's almost like he accepted that last payment then donated the note to charity.

No, he used it to pay off the butcher. So he has got rid of some debt. But it equals out because someone else used it to pay off a debt he was owed.

He's no better or worse off than he was. So its almost a net win for him. He's got some debt off the books, and a potential risky customer debt off his books.

[Thorin]

Actually, it was a completely circular debt so they simply each forgave the next's debt.  They could have done the same without the 100 Euro note, by simply all agreeing to forgive the equal debt from the previous person in the circle.  The 100 Euro note was used as a confidence object, granting confidence to the one with the debt that the debt was now being paid.

It's not a net win for anyone, nor a net loss for anyone.  Everyone had 100 Euros owing to them and 100 Euros owed to someone else - 100 owing - 100 owed = 0 net.

[Darren Dirt]

oops, I forgot that the initial note came from someone who was not owed any debt, and the only debt they incurred ending up being "reversed" by them changing their mind at the end.


But yeah, it's just a "A forgives B, B forgives C, C forgives A" type of thing, now that I think about it again.