Re: [GNC] Asset vs Equity accounts?
That's how I learned it at Ernst & Ernst when I worked there. (I attended the firm's basic accounting course for non-accountants.) I believe our textbook called the special account Income Summary rather than Profit and loss, but that's a minor detail. A very minor detail, especially because what this report traditionally depends on the type of entity for which the books are kept. That is perhaps WHY your basic "accounting for non-accountants" used a more generic name. It was only "for profit" businesses that called this report "Profit and Loss". These days a non-profit might call it "Statement of Revenues and Expenses" (or "Revenue Statement". For personal books (non-business) something like "Income and Expenses". Not that the original name in gnucash was :Income Statement" which is quite close to the name used in your course. Michael D Novack PS -- there are other reports in gnucash where the name chosen can be a source of confusion. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
Strangely nearly all quick-serve businesses stopped offering receipts about 18-24 months ago. (at least in my neck-o-the-woods) Their printers were spitting them out mind you, but they would quickly just crumple and toss them. I'm sure I annoyed a few cashiers by asking for it. I even told one when they complained that perhaps *they* should ask. Their response was, "I used to but *everyone* declined, so I just started throwing them." I'm sure their boss would have been happier to know that tidbit so they could turn off auto-receipt printing, or maybe that would have been an opportune time to instruct their employees to just hand it out and let the customer toss it if they don't want it. (I honestly thought offering a receipt was required by law, I guess not.) To be sure, I don't think any 'conspiracy against receipts memo' was sent out nationwide, but it might be one of those '100th monkey' scenarios. I got a kick out of asking for receipts at the local taproom for each round. (paying cash as I go) One of the bar guests thought I had devised a way to write-off beer! (certainly no, but it was the surest way to keep track of my beer budget.) Regards, Adrien On 2/15/21 7:11 PM, Larry Long wrote: Thanks for the illuminating responses from Stan, Adrien and Michael! It reminds me of years ago when my wife had to start reporting her business expenses and she had a hard time remembering to always get a receipt.One day I finally said "You have two hands. Hold both of them out with your palms up. Just remember when your money leaves one hand, you should be getting a receipt back in the other hand."It served as a good visual reminder for me with expenses, also.:-) ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
Thanks for the illuminating responses from Stan, Adrien and Michael! It reminds me of years ago when my wife had to start reporting her business expenses and she had a hard time remembering to always get a receipt.One day I finally said "You have two hands. Hold both of them out with your palms up. Just remember when your money leaves one hand, you should be getting a receipt back in the other hand."It served as a good visual reminder for me with expenses, also.:-) Larry ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts? (Stan Brown)
On 2021-02-15 14:12, Larry Long wrote: > Stan, > You gave an excellent intro into the fundamentals of accounting (and GnuCash)! > I would like to follow up with a basic question of my own. > Let's say that I have added my new car's value to Assets and my auto loan to > Liabilities.After a year, I log the car's depreciation as a reduction to it's > account in Assets.Where is the account for the offsetting depreciation > amount?Is that an expense? Yes, the two splits for a record of depreciation are a minus to Asset:Car and an equal and opposite plus to Expense:Car Depreciation -- or perhaps Expense:Transportation. Of course you can set whatever account titles you wish, and you can also decide how finely you want to subdivide things. Don't know if you've set up your GC to use standard accounting terminology, but if you have then it would be a credit to the asset (which decreases it) and a debit to the expense (which increases that). -- Stan Brown Tehachapi, CA, USA https://BrownMath.com https://OakRoadSystems.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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts? (Stan Brown)
Thank you very much to all that replied. There are, obviously, a lot of people out there with a much deeper understanding of this than I currently have (or probably ever will) and I thank you for sharing your knowledge and experience. I am slowly getting a handle on the overall concepts and believe the point here is to 'account' for all movement of funds. In a perfect world, every transaction would have a source and a destination (my terminology) and every account would start at zero but if we start with something we need to record where it came from so we can use 'opening balance' in Equity. I'm not completely sure if this is all correct (or close to correct) but it's kind of the way I understand it so far... I believe for my purposes, now, I will record only 'opening balances' in the Equity account. That should get me by until I realize it's completely wrong. ;) Thanks again. On Mon, Feb 15, 2021 at 2:22 PM Adrien Monteleone < adrien.montele...@lusfiber.net> wrote: > Generally yes, but that usually is not done for a personal vehicle > unless you are allowed to do so for some type of credit or deduction on > taxes. Businesses routinely depreciate their fleets however. The rules > are varied and myriad as to what you are allowed to do. > > Regards, > Adrien > > On 2/15/21 4:12 PM, Larry Long wrote: > > Stan, > > You gave an excellent intro into the fundamentals of accounting (and > GnuCash)!I would like to follow up with a basic question of my own. > > Let's say that I have added my new car's value to Assets and my auto > loan to Liabilities.After a year, I log the car's depreciation as a > reduction to it's account in Assets.Where is the account for the offsetting > depreciation amount?Is that an expense? > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > - > 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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
On 2/15/21 4:37 PM, Michael or Penny Novack wrote: On 2/15/2021 5:17 PM, Adrien Monteleone wrote: (technically, Income & Expenses are 'temporary' Equity accounts, but GnuCash gives them their own 'top-level' with Assets, Equity & Liabilities. In the pen days, you closed these out at the end of the year to Retained Earnings, also an Equity account.) Even more pedantic (from somebody who was first keeping books in those days when it was pen and ink in paper) you FIRST closed the income and expense accounts to a special (equity) account called "profit and loss" and you closed THAT account with the net profit (or loss) to retained earnings. The closed "profit and loss" account became your "Profit and Loss" report. How did I forget? Yes, I learned it that way as well. Thus the expanded equation is: Assets = Liabilities + Income - Expenses Well --- Assets = Liabilities + Equity + Income - Expenses < there really isn't any subtraction; expenses are debits and this is the credit side of the equation> Yeah, I once tried to explain to my Mom & Dad how accounting isn't really about math equations, but how you 'account' for what you did. They never got it. Regards, Adrien ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
On 2/15/2021 5:17 PM, Adrien Monteleone wrote: (technically, Income & Expenses are 'temporary' Equity accounts, but GnuCash gives them their own 'top-level' with Assets, Equity & Liabilities. In the pen days, you closed these out at the end of the year to Retained Earnings, also an Equity account.) Even more pedantic (from somebody who was first keeping books in those days when it was pen and ink in paper) you FIRST closed the income and expense accounts to a special (equity) account called "profit and loss" and you closed THAT account with the net profit (or loss) to retained earnings. The closed "profit and loss" account became your "Profit and Loss" report. Thus the expanded equation is: Assets = Liabilities + Income - Expenses Well --- Assets = Liabilities + Equity + Income - Expenses < there really isn't any subtraction; expenses are debits and this is the credit side of the equation> 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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts? (Stan Brown)
Generally yes, but that usually is not done for a personal vehicle unless you are allowed to do so for some type of credit or deduction on taxes. Businesses routinely depreciate their fleets however. The rules are varied and myriad as to what you are allowed to do. Regards, Adrien On 2/15/21 4:12 PM, Larry Long wrote: Stan, You gave an excellent intro into the fundamentals of accounting (and GnuCash)!I would like to follow up with a basic question of my own. Let's say that I have added my new car's value to Assets and my auto loan to Liabilities.After a year, I log the car's depreciation as a reduction to it's account in Assets.Where is the account for the offsetting depreciation amount?Is that an expense? ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
While this may seem pedantic (and maybe it is), most texts present the Accounting Equation as: Assets = Liabilities + Equity Balance Sheets are based off this arrangement of the equation. That is why you will generally see an Asset section first, with a total, and then a second section or column with a "Liabilities + Equity" total that exactly matches the Asset total. Equity can be further broken down to: Income - Expenses (technically, Income & Expenses are 'temporary' Equity accounts, but GnuCash gives them their own 'top-level' with Assets, Equity & Liabilities. In the pen days, you closed these out at the end of the year to Retained Earnings, also an Equity account.) Thus the expanded equation is: Assets = Liabilities + Income - Expenses Regards, Adrien On 2/14/21 3:29 PM, gnu Gord wrote: First off I'll say I have no formal accounting training so I don't really understand accounting terminology or how it is represented in GnuCash. I understand the basic idea that Equity = Assets - Liabilities, but I'm unsure how this should be entered in GnuCash. Specifically, my question is; how do I know if something I have should be recorded in an Asset account or an Equity account? For example, our house. The documentation says an asset is something I own. That would mean our house should go in the Asset account, correct? But the documentation also says equity is my overall net worth. If I don't owe anything on my house, should it be recorded in an equity account instead of an asset account? What about a car, should it be recorded as an asset or equity if I own some of it but have a loan on it as well? Sorry for asking so many dumb questions but my head is about to explode!! ;) ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - 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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts? (Stan Brown)
Stan, You gave an excellent intro into the fundamentals of accounting (and GnuCash)!I would like to follow up with a basic question of my own. Let's say that I have added my new car's value to Assets and my auto loan to Liabilities.After a year, I log the car's depreciation as a reduction to it's account in Assets.Where is the account for the offsetting depreciation amount?Is that an expense? Thank you. Larry Long On Monday, February 15, 2021, 12:30:19 AM EST, gnucash-user-requ...@gnucash.org wrote: ... Date: Sun, 14 Feb 2021 17:08:02 -0800 From: Stan Brown To: gnucash-user@gnucash.org Subject: Re: [GNC] Asset vs Equity accounts? Message-ID: <167aeb21-5037-b157-34fe-85173c33a...@fastmail.fm> Content-Type: text/plain; charset=utf-8 ... Hi, Gord. Welcome to GnuCash! I think you may have missed a fundamental concept, and that's giving you all of the questions you mentioned above. The fundamental concept is: Every transaction, without exception, comprises two or more sub-entries, called "splits" in Gnucash. The splits in any give transaction must balance; if they don't, GC automatically creates an "imbalance" split to tell you the amount they're out of balance. What do I mean by "the splits must balance"? To answer that, let's first rearrange and expand that accounting equation you mentioned. You stated correctly: Equity = Assets - Liabilities That's correct as far as it goes, but it leaves out two other categories of accounts: Income and Expense. You can think of Income and Expense as adjustments to Equity from your day-to-day operations, but for a beginner it's probably easier to just think of them as independent types of accounts. That expands the basic equation in this way: Equity + Income - Expenses = Assets - Liabilities "Equity" is accountant-speak for your net worth. Income increases your net worth, and expenses reduce it. But from the equation, since everything must balance, you can see other possibilities too. Here's an example. Suppose you go to the grocery store and charge $120 worth of groceries to your Visa card. Then your transaction has two splits: Expense:Groceries +120 Liability:Visa +120 Expenses (left side of the equation) and liabilities (right side) both increase by $120, so your transaction is in balance. Now let's take your car question. Your car is an asset. Let's suppose you just bought it for $20,000. You paid $2500 down and financed $17,500. The transaction would be recorded in three splits: Assets:Car +20,000 Liability:Car loan +17,500 Assets:Bank Acct - 2,500 How does that work in terms of the accounting equation? Assets are increasing by 20,000 for the car but decreasing by 2,500 from bank account, for a net increase of 17,500; liabilities are increasing by 17,400. So each side of the equation is increasing by 17,500, and once again your transaction balances. Most types of transactions will increase both sides of the equation or decrease both sides, but some are a plus and a minus on one side that net out to not changing the equation. For instance, you get your Visa bill for $1822 and pay it. Here's your transaction: Liability:Visa -1822 Asset:Bank Acct -1822 The right side of the equation is Assets - Liabilities. If an asset moves up or down, and a liability moves up or down by the same amount, there is no net change on that side of the equation. The details have changed, but not the totals, because of that minus sign in "Assets - Liabilities". Once again, your transaction is in balance. Now let's take your house. Suppose it's worth $300,000, or at least that's what you paid for it, and your current mortgage balance is $170,000. There are three splits in the transaction that records this. Two of them are easy to see: Asset:House 300,000 Liability:Mortgage 170,000 But this is out of balance. How should the 130,000 difference be recorded to keep things in balance? As you suspected, that's part of your net worth, so the third split in this transaction is Equity:Net Worth 130,000 (If you own your house free and clear, you record the full value in Asset:House and also in Equity:Net Worth. Again, the equation balances because each side is increased by $300,000.) Hopefully from this you get the idea. It's not a question of which one account you should record something in, but which two (or more) accounts, to keep every transaction in balance. -- Stan Brown Tehachapi, CA, USA https://BrownMath.com https://OakRoadSystems.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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on
Re: [GNC] Asset vs Equity accounts?
On 2021-02-14 13:29, gnu Gord wrote: > First off I'll say I have no formal accounting training so I don't really > understand accounting terminology or how it is represented in GnuCash. > > I understand the basic idea that Equity = Assets - Liabilities, but I'm > unsure how this should be entered in GnuCash. > > Specifically, my question is; how do I know if something I have should be > recorded in an Asset account or an Equity account? > > For example, our house. The documentation says an asset is something I own. > That would mean our house should go in the Asset account, correct? > But the documentation also says equity is my overall net worth. If I don't > owe anything on my house, should it be recorded in an equity account > instead of an asset account? > > What about a car, should it be recorded as an asset or equity if I own some > of it but have a loan on it as well? > > Sorry for asking so many dumb questions but my head is about to explode!! > ;) Hi, Gord. Welcome to GnuCash! I think you may have missed a fundamental concept, and that's giving you all of the questions you mentioned above. The fundamental concept is: Every transaction, without exception, comprises two or more sub-entries, called "splits" in Gnucash. The splits in any give transaction must balance; if they don't, GC automatically creates an "imbalance" split to tell you the amount they're out of balance. What do I mean by "the splits must balance"? To answer that, let's first rearrange and expand that accounting equation you mentioned. You stated correctly: Equity = Assets - Liabilities That's correct as far as it goes, but it leaves out two other categories of accounts: Income and Expense. You can think of Income and Expense as adjustments to Equity from your day-to-day operations, but for a beginner it's probably easier to just think of them as independent types of accounts. That expands the basic equation in this way: Equity + Income - Expenses = Assets - Liabilities "Equity" is accountant-speak for your net worth. Income increases your net worth, and expenses reduce it. But from the equation, since everything must balance, you can see other possibilities too. Here's an example. Suppose you go to the grocery store and charge $120 worth of groceries to your Visa card. Then your transaction has two splits: Expense:Groceries +120 Liability:Visa+120 Expenses (left side of the equation) and liabilities (right side) both increase by $120, so your transaction is in balance. Now let's take your car question. Your car is an asset. Let's suppose you just bought it for $20,000. You paid $2500 down and financed $17,500. The transaction would be recorded in three splits: Assets:Car +20,000 Liability:Car loan +17,500 Assets:Bank Acct- 2,500 How does that work in terms of the accounting equation? Assets are increasing by 20,000 for the car but decreasing by 2,500 from bank account, for a net increase of 17,500; liabilities are increasing by 17,400. So each side of the equation is increasing by 17,500, and once again your transaction balances. Most types of transactions will increase both sides of the equation or decrease both sides, but some are a plus and a minus on one side that net out to not changing the equation. For instance, you get your Visa bill for $1822 and pay it. Here's your transaction: Liability:Visa -1822 Asset:Bank Acct -1822 The right side of the equation is Assets - Liabilities. If an asset moves up or down, and a liability moves up or down by the same amount, there is no net change on that side of the equation. The details have changed, but not the totals, because of that minus sign in "Assets - Liabilities". Once again, your transaction is in balance. Now let's take your house. Suppose it's worth $300,000, or at least that's what you paid for it, and your current mortgage balance is $170,000. There are three splits in the transaction that records this. Two of them are easy to see: Asset:House300,000 Liability:Mortgage 170,000 But this is out of balance. How should the 130,000 difference be recorded to keep things in balance? As you suspected, that's part of your net worth, so the third split in this transaction is Equity:Net Worth 130,000 (If you own your house free and clear, you record the full value in Asset:House and also in Equity:Net Worth. Again, the equation balances because each side is increased by $300,000.) Hopefully from this you get the idea. It's not a question of which one account you should record something in, but which two (or more) accounts, to keep every transaction in balance. -- Stan Brown Tehachapi, CA, USA https://BrownMath.com https://OakRoadSystems.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 If you are using Nabble or Gmane,
Re: [GNC] Asset vs Equity accounts?
gnuGord, If you have ownership, possession and/or control of your house and car or any other resource then they are assets. Bank accounts are also assets for example. Your furniture, a boat, camper etc are all assets. If you have taken a loan out to buy them, the present value of that loan is a liability, usually against that specific asset (e.g. mortgage) or your assets in general, i.e. you are obligated to pay it back with loss of the asset or a considerable fraction of its value a likely penalty if you don't. Any obligation you have to pay someone else some amount of money is a liability. Your equity in the house and car is the difference between their present value as assets and the outstanding liabilities against those assets. In most cases the cost of an asset is used to record its value as until you have sold it you do not have a definite value to ascribe to it. It is possible to track market values (unrealized gains and losses) on assets but it will be better to leave looking at this until you have the basic accounting under control. Each jurisdiction has rules re reporting of unrealized gains and losses and these can be quite variable). The only entries you normally make to equity as Stephen said are when you enter the opening balances of your assets and liabilities and if you close the temporary equity (Income and Expenses) accounts to equity ( this is not necessary in GnuCash but may be for external accounting procedural purposes). The transactions to add the value of an existing asset is normally: 1. a debit to the asset account for the present value of the asset and 2. a credit entry to the equity opening balances account (or an appropriate subaccount of the opening balances for that specific asset if you require that level of detail) and to add a liability 1. a credit to the liability account recording the liability and 2.a debit to the opening balances sub account of equity (or again a sub account of that depending on the detail you require, i.e. if you need to know the equity you have in specific assets. These are the individual lines (or splits) of a single transaction. If you select View->Auto Split Ledger from the menu then each transaction in a register of an account will open up to display the individual lines/splits composing it. See https://code.gnucash.org/docs/C/gnucash-guide/chapter_basics.html for a very basic introduction to accounting. The Wikipedia articles on Double Entry, debits and Credits and basic accounting are pretty good as well. Otherwise a reasonably recent second hand textbook on financial accounting is a good investment for the basics. David Cousens - David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Asset vs Equity accounts?
On 2/14/21 1:29 PM, gnu Gord wrote: First off I'll say I have no formal accounting training so I don't really understand accounting terminology or how it is represented in GnuCash. I understand the basic idea that Equity = Assets - Liabilities, but I'm unsure how this should be entered in GnuCash. Specifically, my question is; how do I know if something I have should be recorded in an Asset account or an Equity account? For example, our house. The documentation says an asset is something I own. That would mean our house should go in the Asset account, correct? But the documentation also says equity is my overall net worth. If I don't owe anything on my house, should it be recorded in an equity account instead of an asset account? What about a car, should it be recorded as an asset or equity if I own some of it but have a loan on it as well? Sorry for asking so many dumb questions but my head is about to explode!! ;) I know the feeling. Though I have had no "formal" training, my wife has been trained as an accountant. So, let me try to simplify things: 1. Equity -- it happens. Usually you don't do anything to this except in rare instances (such as year end closing of books -- if you need to do that). You will want an "Equity:OpeningBalance" account for the initial transaction that sets up all the opening balances. It will be whatever is left over after setting the opening balance for all the Asset and Liability accounts. You may not want or need an "Equity:RetainedEarnings" account. I have one since I like to close the books at the end of the year. It isn't needed and a lot of folks don't. GnC will handle reports properly either way. 2. Assets -- if you own even a tiny piece of it, it goes here. If you owe a portion then we'll make a second account for it over in Liabilities. Group your assets into logical groups -- like all your accounts at bank X would go into ASSETS:BANKX: (where is Checking, Saving, CD, Money Market -- the various accounts that contain your money. Remember to track CASH as an asset also. House -- it's the purchase price plus any additions you have made over the years -- your account will give you better advice. Vehicles -- what you paid to buy them. If other people owe you money, that would be tracked in an asset account (Loan to Cousin Joe) 3. Liabilities -- what you owe. Car loans. House Mortgage. Credit Card (even when paid off each month), etc. 4. Income -- any money that comes to you whether you will be taxed on it or not. "But", you say, "My paycheck went into the checking account." Yup, you are right. But GnC is a "Double Entry" book keeping system. So, the other side of that transaction for the paycheck is Income (and most likely some expenses). The net goes into "Assets:BankX:Checking" while the gross is in "Income:MyWorkPlace" and any deductions go into "Expense:z" where are for the various deductions your employer takes out. 5. Expenses -- money that went out to buy things (if it went out to reduce a liability then it isn't an expense). Now, I've probably given you too much to think about right now. Feel free to ask further and others may jump in to help clarify things. Don't try to eat the entire elephant at one sitting. -- Stephen M Butler, PMP, PSM stephen.m.butle...@gmail.com kg...@arrl.net 253-350-0166 --- GnuPG Fingerprint: 8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8 ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
