Re: [GNC] Default to Plain English instead of Debit and Credit
The responses make it clear Vince's results are as expected. Why are mine different? See https://bugs.gnucash.org/show_bug.cgi?id=798964#c14 On Sat, 1 Jul 2023 at 14:00, flywire wrote: > Is it CR or DB? > Regards ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
On 2023-07-01 18:26, R Losey wrote: > Helpful, but I spent too much time away from the accounting world, and I've > gotten used to the more general usage of "credit" and "debit" words in > general English, where debit is used for "take away from" and 'credit' is > used for "add to". > > Thus I used the simplified terms in GnuCash. Of course you should use whichever option you wish. But there's one common exception to the rule you stated: when your bank or merchant issues a credit to your account, that doesn't add to anything but _reduces_ your balance. A lot of people have trouble with this point, because the business uses terms that suit _its_ books but are opposite to the terms that suit the customer's books. My own view is that people would be better off just to learn the right uses of "debit" and "credit" -- it's really not that hard, and at least it's unambiguous. But ultimately it's each person's choice of what they feel comfortable with. Stan Brown Tehachapi, CA, USA https://BrownMath.com ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
Helpful, but I spent too much time away from the accounting world, and I've gotten used to the more general usage of "credit" and "debit" words in general English, where debit is used for "take away from" and 'credit' is used for "add to". Thus I used the simplified terms in GnuCash. Here is the table in a mono-spaced font: (an asterisk indicates a main account type) * BALANCEACCCOUNT TYPE DEBIT CREDIT debitNONE Funds In Funds Out debitBANK DepositWithdrawal debitCASH ReceiveSpend debitCREDIT PaymentCharge credit CREDIT PaymentCharge * DebitASSET Increase Decrease * Credit LIABILITY Decrease Increase debitSTOCK BuySell debitMUTUAL BuySell debitCURRENCY BuySell * Credit INCOME Charge Income * DebitEXPENSEExpenseRebate * Credit PAYABLEPaymentBill * DebitRECEIVABLE InvoicePayment credit TRADINGDecrease Increase * Credit EQUITY Decrease Increase On Sat, Jul 1, 2023 at 10:00 AM Adrien Monteleone < adrien.montele...@lusfiber.net> wrote: > I understand your post is in the context of the importer - which is a > whole different beast, but discerning the 'normal' balance of account > types is not a mystery. It is dependent on their position in the > Accounting Equation. > > > Assets = Liabilities + Equity > > *adding in the special Equity type account of Retained Earnings yields: > > > Assets = Liabilities + Equity + Retained Earnings > > > Retained Earnings = Income - Expenses > > > thus: > > > Assets = Liabilities + Equity + Income - Expenses > > > moving terms so all are 'positive': > > > Assets + Expenses = Liabilities + Equity + Income > > > and since: > > > Debit = Credit, Left Side = Right Side > > > therefore: > > Assets & Expenses are normally (when positive) Debit balanced accounts > (left side), and Liabilities, Equity & Income are normally (when > positive) Credit balanced accounts (right side). > > Gnucash treats the equation differently internally, so by default this > is a bit different: > > Assets + Expenses - Liabilities - Equity - Income = 0 > > thus: > > By *default* in Gnucash, Liabilities, Equity & Income normally show > their Credit balances as negative numbers. (because their terms have > been moved to the opposite, or left, side of the equation in the code) > The 'Reversed Balanced Accounts' preference adjusts the *presentation* > back to the original equation per your liking. Internally, these > accounts remain negative when they have a credit balance. > > - > > Your below chart looks correct except the one type I noted below: > > Regards, > Adrien > > On 6/30/23 11:00 PM, flywire wrote: > > Is it CR or DB? Who knows, toss a coin: > > https://bugs.gnucash.org/show_bug.cgi?id=798964 > > > > An interesting list of accounts adapted from a comment with an `*` next > to > > the main account types: > > > > * BALANCE ACCCOUNT TYPE DEBITCREDIT > >debitNONE Funds In Funds Out > >debitBANK Deposit Withdrawal > >debitCASH Receive Spend > > - > >debitCREDIT Payment Charge > credit CREDIT Payment Charge > *A Credit Card type account is a Liability and thus normally has a > Credit balance. > > - > > * DebitASSET Increase Decrease > > * Credit LIABILITY Decrease Increase > >debitSTOCK Buy Sell > >debitMUTUAL Buy Sell > >debitCURRENCY Buy Sell > > * Credit INCOME Charge Income > > * DebitEXPENSEExpense Rebate > > * Credit PAYABLEPayment Bill > > * DebitRECEIVABLE Invoice Payment > >credit TRADINGDecrease Increase > > * Credit EQUITY Decrease Increase > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > 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. > -- _ Richard Losey rlo...@gmail.com Micah 6:8 ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
I admit I am a bit lost as to what specific issue is being discussed here beyond the (recurring) challenge of translating double-entry accounting in simple terms, which is real but hardly a GC specific challenge. As relating specifically to account balances (if this is what is being discussed), then I do certainly understand the challenge of trying to show balance in a single column because one way or another it requires using positive or negative signs at some point. As far as I know, that's what the 'Reversed Balance Account" under Edit - Preference - Accounts let's you tweak as a user in the context of single register and to some extend in the transaction report as well (with some problematic side effects in totals and running totals in that case). If you want accounts that TYPICALLY have a credit balance to show a credit balance as a positive number in the balance column, then the option is there. If you want income and expense accounts to show a (respectively) negative and positive balance, then the option is there. But it's purely a visual on the screen. By definition if you bring credit and debit amounts in the SAME column combining income/expense and asset/liabilities account types, then a standard has to be used for one of debit/credit to be positive and the other negative. Typically debit is positive and credit is negative, but you could do debit negative and credit positive and it's fine as well mathematically. What you CANNOT do is mix both of these standards in the overall accounting equation, that simply is impossible math. But you can certainly "cheat" and present things differently when only showing one type of account, or even accounts limited to BS or P Other accounting systems I have used bypass this issue by simply never putting debit and credit amounts in the same columns, even in reports and even more so in registers. So in that case, you not only show 2 columns for the transaction amounts as GC already does, but you also show 2 columns for the account balance (debit and credit as well). Problem solved as no negative numbers are ever shown in that case. With informal labels that would look like this for a bank account for instance (the labels could be different, just giving an example). DATE DESCRIPTIONDEPOSIT WITHDRAWAL AVAILABLE BALANCEOVERDRAFT DUE Just as on every transaction you can only have a positive amount in either the DEPOSIT or WITHDRAWAL column, you would also only have one positive balance amount shown in either the AVAILABLE BALANCE or OVERDRAFT DUE column. I am not saying we should do this; I am just showing that the same dual balance column concept could be implemented with informal labels. After all, informal labels are just account-context-specific labels for DEBIT and CREDIT, nothing else. On accounts such as expense and income, it is very rare to have a (respectively) credit or debit balance. So the informal headings are even harder to come up with just as they are for the main contra-column (in particular I am not a big fan of "charge" used for income debit); The words rebate and refund have dual meaning since they can be seen from the person being paid giving a refund or a rebate; or the person paying getting a refund or a rebate. So even "Rebate" being the contra-account for expense can be confusing. My personal preference would be to use refund and accept longer names, such as "Refund Received" for the contra-expense accounts and "Refund Given" for the contra-income accounts. As for how dual balance columns (if used hypothetically) would be called, that's a whole other matter. Finally some accounting packages will show you a third type of dual columns: the running debit total and running credit total. In the context of income accounts for instance, it's the running total of all refunds given and the running total of all income received (not reduced for refunds given). Hardly something we want to do with GC but I am pointing this out to show the real challenge of translating a simple yet powerful concept (debit/credit) into everyday language without going overboard. That's my take. --Vincent On Sat, Jul 1, 2023 at 8:00 AM Adrien Monteleone < adrien.montele...@lusfiber.net> wrote: > I understand your post is in the context of the importer - which is a > whole different beast, but discerning the 'normal' balance of account > types is not a mystery. It is dependent on their position in the > Accounting Equation. > > > Assets = Liabilities + Equity > > *adding in the special Equity type account of Retained Earnings yields: > > > Assets = Liabilities + Equity + Retained Earnings > > > Retained Earnings = Income - Expenses > > > thus: > > > Assets = Liabilities + Equity + Income - Expenses > > > moving terms so all are 'positive': > > > Assets + Expenses = Liabilities + Equity + Income > > > and since: > > > Debit = Credit, Left Side = Right Side > > > therefore: > > Assets & Expenses are normally (when positive) Debit
Re: [GNC] Default to Plain English instead of Debit and Credit
I understand your post is in the context of the importer - which is a whole different beast, but discerning the 'normal' balance of account types is not a mystery. It is dependent on their position in the Accounting Equation. Assets = Liabilities + Equity *adding in the special Equity type account of Retained Earnings yields: Assets = Liabilities + Equity + Retained Earnings Retained Earnings = Income - Expenses thus: Assets = Liabilities + Equity + Income - Expenses moving terms so all are 'positive': Assets + Expenses = Liabilities + Equity + Income and since: Debit = Credit, Left Side = Right Side therefore: Assets & Expenses are normally (when positive) Debit balanced accounts (left side), and Liabilities, Equity & Income are normally (when positive) Credit balanced accounts (right side). Gnucash treats the equation differently internally, so by default this is a bit different: Assets + Expenses - Liabilities - Equity - Income = 0 thus: By *default* in Gnucash, Liabilities, Equity & Income normally show their Credit balances as negative numbers. (because their terms have been moved to the opposite, or left, side of the equation in the code) The 'Reversed Balanced Accounts' preference adjusts the *presentation* back to the original equation per your liking. Internally, these accounts remain negative when they have a credit balance. - Your below chart looks correct except the one type I noted below: Regards, Adrien On 6/30/23 11:00 PM, flywire wrote: Is it CR or DB? Who knows, toss a coin: https://bugs.gnucash.org/show_bug.cgi?id=798964 An interesting list of accounts adapted from a comment with an `*` next to the main account types: * BALANCE ACCCOUNT TYPE DEBITCREDIT debitNONE Funds In Funds Out debitBANK Deposit Withdrawal debitCASH Receive Spend - debitCREDIT Payment Charge credit CREDIT Payment Charge *A Credit Card type account is a Liability and thus normally has a Credit balance. - * DebitASSET Increase Decrease * Credit LIABILITY Decrease Increase debitSTOCK Buy Sell debitMUTUAL Buy Sell debitCURRENCY Buy Sell * Credit INCOME Charge Income * DebitEXPENSEExpense Rebate * Credit PAYABLEPayment Bill * DebitRECEIVABLE Invoice Payment credit TRADINGDecrease Increase * Credit EQUITY Decrease Increase ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
On 7/1/2023 12:00 AM, flywire wrote: Is it CR or DB? Who knows, toss a coin: https://bugs.gnucash.org/show_bug.cgi?id=798964 An interesting list of accounts adapted from a comment with an `*` next to the main account types: Easy to tell which column is debit and which credit. The debit column is to the left of the credit column no matter what the type of the account. Now whether debit or credit is an increase or decrease does depend on the fundamental account type. The fundamental types are asset, liability. and equity. For example, account types income and expense are of fundamental type equity (temporarily holding amounts that would go to equity if you did a "close the books") You can use the "user friendly" alternatives that change depending on the specific account type But do note that when helping I will usually speak in terms of debit and credit. I learned in the old days of pen and ink on accounting lined paper, Michael D Novack ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
Is it CR or DB? Who knows, toss a coin: https://bugs.gnucash.org/show_bug.cgi?id=798964 An interesting list of accounts adapted from a comment with an `*` next to the main account types: * BALANCE ACCCOUNT TYPE DEBITCREDIT debitNONE Funds In Funds Out debitBANK Deposit Withdrawal debitCASH Receive Spend debitCREDIT Payment Charge * DebitASSET Increase Decrease * Credit LIABILITY Decrease Increase debitSTOCK Buy Sell debitMUTUAL Buy Sell debitCURRENCY Buy Sell * Credit INCOME Charge Income * DebitEXPENSEExpense Rebate * Credit PAYABLEPayment Bill * DebitRECEIVABLE Invoice Payment credit TRADINGDecrease Increase * Credit EQUITY Decrease Increase Regards ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] Default to Plain English instead of Debit and Credit
flywire, That looks like a bunch of documentation bug candidates. Though I'm pretty certain, the non-formal labels are default on new installations. And with regards to explaining Accounts or Transactions first, I think it would be awkward to explain entering a transaction without first explaining that you are doing so by affecting Accounts and what GnuCash means by 'accounts'. (The user also has to set up 'accounts' before entering transactions, so I would think explaining 'accounts' first, makes more sense) Regards, Adrien On 5/8/23 7:08 PM, flywire wrote: GnuCash is presented as a double entry accounting system using debits and credits, but it's not special, it just lacks a good explanation. The Guide starts with a quick overview followed by The Basics describing Accounting Concepts. The guide even warns that accounting debits and credits are used contrary to the way most people understand them, and furthermore, GnuCash can be configured to use deposit and withdrawal, yet new users must understand the terms to use GnuCash. Other financial software for non-accountants explains how it works in plain English without confusing accounting concepts. GnuCash can work like that too, but it's not the default and the formal terms need to be understood to interpret the documentation. Let's heed the warning and remove the debits and credits terms from the default software and documentation. It would be easy enough or those familiar with the formal terms to change the settings and they would still understand documentation written in simple terms. In my view, the concept of a transaction also needs to be explained before accounts. Accounting is a record of transactions that record how money moves from one place to another. Understandably, accounting calls those places accounts and arranges them in standard types. Everyone is familiar with withdrawing cash from a savings account. Those are two accounts, savings, and cash. You could spend that cash on groceries or clothing, two more accounts. The Basic Account types and The Accounting Equation are explained in the Guide. Table 2.1 shows the effect of an increase or decrease in each account type and that important concept that does not need the debit and credit line. The note and warning could be reworked to refer to debit and credit as an option in preferences. The Double Entry section is really an explanation of how transactions work in accounting so rename it. Double entry and T-Account are useful concepts to mention in the explanation. Unfortunately, double entry is confusing with a default basic ledger view, and double line view in the interface. Finally, a mention of reports. The accounting equation lists all the accounts as positive numbers and every report I have ever seen uses positive numbers in the report account types then follows the equation to calculate the grand total. There is no benefit in producing reports only understood by the GnuCash community. Regards ___ gnucash-user mailing list gnucash-user@gnucash.org 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. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
[GNC] Default to Plain English instead of Debit and Credit
GnuCash is presented as a double entry accounting system using debits and credits, but it's not special, it just lacks a good explanation. The Guide starts with a quick overview followed by The Basics describing Accounting Concepts. The guide even warns that accounting debits and credits are used contrary to the way most people understand them, and furthermore, GnuCash can be configured to use deposit and withdrawal, yet new users must understand the terms to use GnuCash. Other financial software for non-accountants explains how it works in plain English without confusing accounting concepts. GnuCash can work like that too, but it's not the default and the formal terms need to be understood to interpret the documentation. Let's heed the warning and remove the debits and credits terms from the default software and documentation. It would be easy enough or those familiar with the formal terms to change the settings and they would still understand documentation written in simple terms. In my view, the concept of a transaction also needs to be explained before accounts. Accounting is a record of transactions that record how money moves from one place to another. Understandably, accounting calls those places accounts and arranges them in standard types. Everyone is familiar with withdrawing cash from a savings account. Those are two accounts, savings, and cash. You could spend that cash on groceries or clothing, two more accounts. The Basic Account types and The Accounting Equation are explained in the Guide. Table 2.1 shows the effect of an increase or decrease in each account type and that important concept that does not need the debit and credit line. The note and warning could be reworked to refer to debit and credit as an option in preferences. The Double Entry section is really an explanation of how transactions work in accounting so rename it. Double entry and T-Account are useful concepts to mention in the explanation. Unfortunately, double entry is confusing with a default basic ledger view, and double line view in the interface. Finally, a mention of reports. The accounting equation lists all the accounts as positive numbers and every report I have ever seen uses positive numbers in the report account types then follows the equation to calculate the grand total. There is no benefit in producing reports only understood by the GnuCash community. Regards ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
