Double-entry bookkeeping for trading operations with ledger management, P&L statements, balance sheets, and cash flow reporting

Trade Accounting Run your trading operation like a business. Every SOL spent, every token acquired, every fee paid, every gain realized — tracked with double entry bookkeeping so your books always balance. Whether you trade through a personal wallet or an LLC, proper accounting turns chaos into clarity. Core principle : Every transaction touches at least two accounts. Buy a token? Cash goes down, token holdings go up — by the same amount. This double entry constraint catches errors automatically: if debits do not equal credits, something is wrong. Why Traders Need Accounting Most traders track P&L loosely — "I started with 50 SOL and now I have 62 SOL." That tells you nothing about: How much came from realized trades vs unrealized positions What you paid in cumulative fees (gas, priority fees, swap fees) Whether your staking and LP income covers your operating costs Your actual cost basis for each holding (critical for taxes) Cash flow timing — are you profitable but illiquid? Proper accounting answers all of these. It also separates trading P&L (mark to market, useful for strategy evaluation) from tax P&L (realized gains using a specific cost basis method, required for compliance). Account Types A trading operation uses four account categories following standard accounting: Category Normal Balance Examples Assets Debit Cash (SOL/USDC), token holdings, LP positions, staking deposits, receivables Liabilities Credit Margin borrowing, accrued taxes payable Income Credit Realized trading gains, staking rewards, airdrop income, LP fee income Expenses Debit Trading fees, gas/priority fees, subscription costs, data feeds Equity Credit Owner capital contributions, retained earnings, withdrawals (contra) Chart of Accounts See references/planned features.md for a full chart of accounts. A minimal setup: Double Entry Bookkeeping Every transaction records equal debits and credits. Debits increase asset and expense accounts; credits increase liability, income, and equity accounts. Entry Examples Buy 1000 BONK for 0.5 SOL (0.001 SOL gas fee): Account Debit Credit Token Holdings – BONK 0.501 SOL Cash – SOL 0.501 SOL Or with the fee broken out explicitly: Account Debit Credit Token Holdings – BONK 0.5 SOL Gas & Priority Fees 0.001 SOL Cash – SOL 0.501 SOL Sell 1000 BONK for 0.8 SOL (cost basis was 0.5 SOL, 0.001 SOL gas): Account Debit Credit Cash – SOL 0.799 SOL Gas & Priority Fees 0.001 SOL Token Holdings – BONK 0.5 SOL Realized Trading Gains 0.3 SOL Receive staking rewards of 0.05 SOL: Account Debit Credit Cash – SOL 0.05 SOL Staking Rewards 0.05 SOL Receive airdrop of 5000 JUP (valued at 2.1 SOL at receipt): Account Debit Credit Token Holdings – JUP 2.1 SOL Airdrop Income 2.1 SOL Collect LP fees of 0.03 SOL: Account Debit Credit Cash – SOL 0.03 SOL LP Fee Income 0.03 SOL Partial close — sell half a position: If you hold 2000 BONK at cost basis 1.0 SOL and sell 1000 for 0.7 SOL: Account Debit Credit Cash – SOL 0.699 SOL Gas & Priority Fees 0.001 SOL Token Holdings – BONK 0.5 SOL Realized Trading Gains 0.2 SOL The cost basis of the sold portion (0.5 SOL = half of 1.0 SOL) is removed from the asset account. Transaction Types The ledger handles these trading flows: Flow Accounts Touched Fund account Cash (debit), Owner Capital (credit) Withdraw funds Owner Withdrawals (debit), Cash (credit) Buy token Token Holdings (debit), Cash (credit), Gas Expense (debit) Sell token Cash (debit), Token Holdings (credit), Realized Gains (credit or debit for loss), Gas Expense (debit) Partial close Same as sell, pro rated cost basis Swap token for token Token B (debit), Token A (credit), fees Staking deposit Staking Deposits (debit), Cash (credit) Staking reward Cash (debit), Staking Rewards (credit) Airdrop received Token Holdings (debit), Airdrop Income (credit) LP fee collected Cash (debit), LP Fee Income (credit) Trading fee Trading Fees (debit), Cash (credit) Gas/priority fee Gas & Priority Fees (debit), Cash (credit) Reports Profit & Loss Statement Shows income minus expenses for a period: Balance Sheet Shows the accounting equation: Assets = Liabilities + Equity. Cash Flow Statement Tracks where cash came from and where it went: Trading P&L vs Tax P&L These are different numbers and serve different purposes: Aspect Trading P&L Tax P&L Purpose Strategy evaluation Compliance, filing Unrealized gains Included (mark to market) Excluded (until realized) Cost basis method Average cost (simple) FIFO, LIFO, or specific ID (jurisdiction dependent) Timing Real time At disposal event Airdrops Valued at receipt Ordinary income at FMV on receipt LP IL Tracked as unrealized loss Not a taxable event until withdrawal The ledger in scripts/trading ledger.py tracks realized gains using FIFO by default. For trading P&L, you can overlay mark to market valuations on open positions. See references/planned features.md for detailed worked examples of how the same trades produce different P&L under FIFO vs average cost. Entity Considerations Traders operating through an LLC or S Corp should track additional accounts: Management fees — if the entity charges a management fee Distributions — payments from entity to owner (not the same as withdrawals from a trading account) Payroll expenses — S Corp officer salary Tax provisions — estimated quarterly tax payments The accounting principles are identical; the chart of accounts simply expands. The scripts in this skill focus on the trading level ledger, which is the foundation for entity level reporting. Quick Start Run the demo script to see a full month of trading activity with all report types: Use Cases 1. Track real P&L — Know exactly how much you made after all fees, not just entry/exit prices 2. Tax preparation — Hand your accountant a clean ledger with cost basis and realized gains 3. Fee analysis — Discover that gas and priority fees are eating 3% of your gross profits 4. Strategy comparison — Compare net P&L across strategies, not just win rates 5. Cash flow planning — Know if you have enough liquid SOL for the next trade 6. Audit trail — Every number traces back to a dated, memo tagged journal entry Prerequisites Python 3.10+ No external dependencies (the ledger uses only the standard library) Files File Description references/planned features.md Chart of accounts, double entry examples, report formats, trading vs tax P&L scripts/trading ledger.py Double entry ledger with P&L, balance sheet, and demo mode Disclaimer : This skill provides accounting structure and calculations for informational and organizational purposes only. It is not tax advice, legal advice, or financial advice. Consult a qualified tax professional or CPA for guidance on your specific tax obligations. Cryptocurrency tax treatment varies by jurisdiction and changes frequently.

trade-accounting