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SQL for Finance and Accounting

bookTransaction Logic and ACID Properties

In financial systems, transactions are at the core of reliable operations. A transaction is a sequence of one or more SQL statements that are executed as a single unit of work. Transactions are essential for ensuring that financial data remains consistent, accurate, and reliableβ€”even when multiple users or systems are updating records at the same time. The reliability of transactions is defined by the ACID properties: Atomicity, Consistency, Isolation, and Durability.


              
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-- Example: Transferring funds between two accounts using a transaction
BEGIN;

UPDATE balances
SET balance = balance - 200.00
WHERE account_id = 1001;

UPDATE balances
SET balance = balance + 200.00
WHERE account_id = 1002;

COMMIT;
copy

Each ACID property plays a crucial role in financial operations:

  • Atomicity: ensures that all statements within a transaction are completed successfully. If any part fails, the entire transaction is undone. This prevents situations where funds are deducted from one account but not credited to another;
  • Consistency: guarantees that a transaction brings the database from one valid state to another, maintaining all rules such as balance constraints or accounting principles;
  • Isolation: ensures that concurrent transactions do not interfere with each other. This is vital in finance, where simultaneous updates could otherwise lead to incorrect balances or double spending;
  • Durability: means that once a transaction is committed, its changes are permanentβ€”even in the event of a system failure. This gives you confidence that completed operations, like a deposit or withdrawal, will not be lost.

Sometimes, a transaction may fail partway throughβ€”perhaps due to a constraint violation, a system error, or manual intervention. In these cases, SQL provides the ROLLBACK command to undo all changes made during the transaction, maintaining the integrity of financial data.


              
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-- Example: A transaction that fails and is rolled back
BEGIN;

UPDATE balances
SET balance = balance - 2000.00
WHERE account_id = 1004;

-- Suppose this causes the balance to go negative, violating a constraint

ROLLBACK;
copy

When a transaction is rolled back, all changes made since the transaction began are undone. This is especially important in financial databases, where even a single error could have significant consequences. By using ROLLBACK, you ensure that only valid, complete sets of changes are applied, and any partial or invalid updates are discarded.

Note
Definition

Transaction isolation levels define how and when the changes made by one transaction become visible to other transactions. Common levels include READ UNCOMMITTED, READ COMMITTED, REPEATABLE READ, and SERIALIZABLE. Higher isolation levels provide greater data consistency but may reduce performance due to increased locking.

1. What does the COMMIT statement do in a transaction?

2. Which ACID property ensures that all steps in a transaction are completed or none at all?

3. Why is transaction isolation important in financial databases?

question mark

What does the COMMIT statement do in a transaction?

Select the correct answer

question mark

Which ACID property ensures that all steps in a transaction are completed or none at all?

Select the correct answer

question mark

Why is transaction isolation important in financial databases?

Select the correct answer

Everything was clear?

How can we improve it?

Thanks for your feedback!

SectionΒ 4. ChapterΒ 5

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bookTransaction Logic and ACID Properties

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In financial systems, transactions are at the core of reliable operations. A transaction is a sequence of one or more SQL statements that are executed as a single unit of work. Transactions are essential for ensuring that financial data remains consistent, accurate, and reliableβ€”even when multiple users or systems are updating records at the same time. The reliability of transactions is defined by the ACID properties: Atomicity, Consistency, Isolation, and Durability.


              
123456789101112

            
-- Example: Transferring funds between two accounts using a transaction
BEGIN;

UPDATE balances
SET balance = balance - 200.00
WHERE account_id = 1001;

UPDATE balances
SET balance = balance + 200.00
WHERE account_id = 1002;

COMMIT;
copy

Each ACID property plays a crucial role in financial operations:

  • Atomicity: ensures that all statements within a transaction are completed successfully. If any part fails, the entire transaction is undone. This prevents situations where funds are deducted from one account but not credited to another;
  • Consistency: guarantees that a transaction brings the database from one valid state to another, maintaining all rules such as balance constraints or accounting principles;
  • Isolation: ensures that concurrent transactions do not interfere with each other. This is vital in finance, where simultaneous updates could otherwise lead to incorrect balances or double spending;
  • Durability: means that once a transaction is committed, its changes are permanentβ€”even in the event of a system failure. This gives you confidence that completed operations, like a deposit or withdrawal, will not be lost.

Sometimes, a transaction may fail partway throughβ€”perhaps due to a constraint violation, a system error, or manual intervention. In these cases, SQL provides the ROLLBACK command to undo all changes made during the transaction, maintaining the integrity of financial data.


              
12345678910

            
-- Example: A transaction that fails and is rolled back
BEGIN;

UPDATE balances
SET balance = balance - 2000.00
WHERE account_id = 1004;

-- Suppose this causes the balance to go negative, violating a constraint

ROLLBACK;
copy

When a transaction is rolled back, all changes made since the transaction began are undone. This is especially important in financial databases, where even a single error could have significant consequences. By using ROLLBACK, you ensure that only valid, complete sets of changes are applied, and any partial or invalid updates are discarded.

Note
Definition

Transaction isolation levels define how and when the changes made by one transaction become visible to other transactions. Common levels include READ UNCOMMITTED, READ COMMITTED, REPEATABLE READ, and SERIALIZABLE. Higher isolation levels provide greater data consistency but may reduce performance due to increased locking.

1. What does the COMMIT statement do in a transaction?

2. Which ACID property ensures that all steps in a transaction are completed or none at all?

3. Why is transaction isolation important in financial databases?

question mark

What does the COMMIT statement do in a transaction?

Select the correct answer

question mark

Which ACID property ensures that all steps in a transaction are completed or none at all?

Select the correct answer

question mark

Why is transaction isolation important in financial databases?

Select the correct answer

Everything was clear?

How can we improve it?

Thanks for your feedback!

SectionΒ 4. ChapterΒ 5
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