On Sun, Oct 12, 2014 at 6:00 AM, Mike Charlton <[email protected]> wrote:
> Just a quick pointer (which you probably will notice yourself). You have > a typo/thinko in the second transaction. > > 2014/10/11 Jane Doe > Liabilities:Debt:Jane Doe -10 EUR > Assets:Accounts:Checking > > The sign is wrong. You need to have positive number when paying back the > Liabilities > so that your Checking account goes down ;-) > Ah yeah, didn't see that either, indeed. I think the topic of perspective is important for newbies (of which I count > myself). I kept getting confused about > the sign a transaction should have until I realized every time I receive > money, the account I receive the money > from has a negative transaction. Similarly, every time I pay money, the > account I pay has a positive transaction. > > That way it makes sense that Liabilities will be negative when I borrow > money and positive when I pay it back. > Income will always be negative (I'm not giving my income back!!!). > Expenses will always be positive > (The shop keepers refuse to refund my money!!!). Assets will be positive > when I receive them and negative > when I spend them. > You can look at it this way instead: if the posting is positive, it's always good from your perspective, from the perspective of that account in isolation. If it's negative, it's always bad from your perspective. This always works. Increasing the value of an asset or liability account is always good for you (when you're not considering liabilities as credit accounts with inverted signs). This also works for income statement accounts, if you think of them right: - Increasing an expense is good for you: you obtain the expense. Expenses are things received in exchange of assets. Think of a food expense as a yummy meal resting in your belly. - Decreasing your income account is bad for you, this is your "work potential dollars" you're giving away, but it's always in exchange of a corresponding asset and expense. Hope that helps > > On 12 October 2014 11:41, Martin Blais <[email protected]> wrote: > >> Yes, this is correct. >> >> Jane's "asset" account is to be tracked by herself. From your perspective >> (the perspective of your ledger), the account is a liability. All accounts >> are to be treated from your own perspective. Jane's asset is not your asset. >> >> >> >> On Sun, Oct 12, 2014 at 3:50 AM, Roland Tepp <[email protected]> wrote: >> >>> So, I just started out with Ledger, to get my finances under control. >>> >>> As I owed some money to a friend of mine over a small favor, I filed it >>> in my initial transaction as: >>> >>> ... >>> Liabilities:Debt:Jane Doe -10 EUR >>> ... >>> Equity:Opening Balances >>> >>> So, now that I payed her back, how should I file it. >>> >>> My initial thought was tho file it like this: >>> >>> 2014/10/11 Jane Doe >>> Liabilities:Debt:Jane Doe -10 EUR >>> Assets:Accounts:Checking >>> >>> But then it really just shows my money going to cover for a debt, but >>> not going to the Jane's account (where it actually will be going) >>> >>> So, Is the above method okay, or is there some better way to express >>> such situations? >>> >>> PS - I am really new to all of this, so expect to explain this all to me >>> patiently as I was 7 years old. >>> >>> Thank you for your patience and help. >>> >>> >>> Roland. >>> >>> -- >>> >>> --- >>> You received this message because you are subscribed to the Google >>> Groups "Ledger" group. >>> To unsubscribe from this group and stop receiving emails from it, send >>> an email to [email protected]. >>> For more options, visit https://groups.google.com/d/optout. >>> >> >> -- >> >> --- >> You received this message because you are subscribed to the Google Groups >> "Ledger" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to [email protected]. >> For more options, visit https://groups.google.com/d/optout. >> > > -- > > --- > You received this message because you are subscribed to the Google Groups > "Ledger" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > For more options, visit https://groups.google.com/d/optout. > -- --- You received this message because you are subscribed to the Google Groups "Ledger" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
