On Sun, 2023-07-16 at 13:50 -0500, Adrien Monteleone wrote: > On 7/12/23 10:53 AM, Default User wrote: > > ... I understand that the fundamental accounting equation > > is, of course: > > > > Assets - Liabilities = Equity > > No, and if you answered that on a test, it would be marked wrong. > > While the math works out and equations can be manipulated (as is the > case with your example above), the *Fundamental* Accounting Equation > is: > > Assets = Liabilities + Equity > > This is a system of Balance. Writing the equation correctly describes > how the system is designed. > > There is a Left Side that is Equal to the Right Side. > > Debit is on the Left. > Credit is on the Right. > > Debit = Credit > > Assets are normally Debit balanced. > Liabilities & Equity are normally Credit balanced. > > You can expand the equation to include the temporary accounts Income > & > Expenses, and being contributions to Equity, they belong on the Right > or > Credit side of the equation: > > Assets = Liabilities + Equity + (Income - Expenses) > > Notice the (-) sign in front of Expenses. This indicates it is a > 'contra > balanced' account, and since it is on the Right side of the equation > that means it is normally has the opposite balance of its side > (Credit), > thus it normally has a Debit balance. > > You can further manipulate the equation so all Debit balanced > accounts > are on the left, and only Credit balanced accounts are on the right: > > Assets + Expenses = Liabilities + Equity + Income > > This is all right out of a basic accounting textbook. > > There are many online, and every local library will likely have one > too. > > Regards, > Adrien > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All.
Hi, Adrien! Thanks for the explanation. I appreciate it! :) _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
