How to Create Wallets in the Ledger System

A wallet is a collection of funds associated with a ledger account. Each wallet is uniquely identified by its address and is characterized by:

• Currency: The type of currency the wallet supports (e.g., USD, GBP).

• Accounting Type: Indicates the financial category (Asset, Liability, Revenue, Expense, Equity).

• Decimal Places: Specifies the precision for balances.

Wallets enable:

• Segregation of funds by purpose (e.g., operational funds vs. reserves).

• Accurate accounting for transactions and balances.

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When to Create Wallets

Wallets should be created in the following scenarios:

• Setting Up New Accounts: Every account needs at least one wallet to store funds.

• Handling Multiple Currencies: Separate wallets are required for each currency under an account.

• Isolating Transactions: Use distinct wallets for different types of funds or transactions (e.g., revenue vs. expenses).

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How to Create Wallets

1. Prepare the Parent Account

Before creating a wallet, ensure that a parent account (chart or group) is already set up. Wallets cannot exist independently and must be associated with an account.

Example Command (Create Parent Account):

./luca create-chart-account company operational-account
./luca transition /chart/company/operational-account OPEN

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1. Define Wallet Attributes

Determine the following attributes for the wallet:

• Wallet Name: A unique identifier for the wallet under the account.

• Currency: Specify the currency code (e.g., GBP, USD).

• Accounting Type: Choose one of the following:

  • ASSET: Owned resources.

  • LIABILITY: Obligations to third parties (e.g., customer balances).

  • REVENUE: Income streams.

  • EXPENSE: Costs incurred.

  • EQUITY: Owner’s residual interest in assets.

• Decimal Places: Define the precision for balance calculations.

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3: Create the Wallet

Use the luca command-line tool to create the wallet. Include the parent account, wallet name, currency, accounting type, and decimal places.

Example Command:

./luca create-chart-wallet --create-parent company operational-account default GBP ASSET --decimal-places=2

This creates a wallet named default under the operational-account with:

• Currency: GBP

• Accounting Type: ASSET

• Decimal Places: 2

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4: Verify the Wallet

After creation, verify that the wallet has been set up correctly by retrieving its details.

Example Command:

./luca read-chart-account company operational-account

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Best Practices

• Use Clear Wallet Names: Names like default, sales, or savings make it easier to identify wallets later.

• Ensure Accurate Decimal Places: Use sufficient precision to avoid errors in large transactions (e.g., cryptocurrency wallets may require up to 8 decimal places).

• Plan Currency and Accounting Types: Define these attributes during account setup to prevent unnecessary modifications later.

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Troubleshooting Wallet Creation

• Error: Parent account does not exist.

  • Ensure the parent account is created and transitioned to OPEN.

  Command to Create Parent:

  ./luca create-chart-account company reserve-account
  ./luca transition /chart/company/reserve-account OPEN

• Error: Invalid accounting type.

  • Confirm the accounting type matches one of the predefined types: ASSET, LIABILITY, REVENUE, EXPENSE, EQUITY.

• Error: Wallet already exists.

  • Use the --modify-if-exists flag to update the wallet.

  Command:

  ./luca create-chart-wallet --modify-if-exists company operational-account default GBP ASSET --decimal-places=2