Hi Brian, This the real application of the general accounting equation which is often written in the form Assets = Liabilities + Equity + (Income - Expenses). Accounting students usually have this drummed into them from lecture 1
If you rearrange it so there are no negative terms with assets on the left hand side (LHS) then Assets + Expenses = Liabilities + Equity + Income which is the same as the equation you have with the , then the accounts on the LHS of the equal sign are known as debit balance accounts and those on the RHS as credit balance accounts. Debits increase the balance of the debit balance accounts (LHS) and credits decrease the balance. Credits increase the balance of the credit balance accounts (RHS) and debits increase the balance. I have been meaning to add this to the explanantion in the Help manual for some time to clarify it. It is almost in there but not quite. In modern accounting practice I have never seen draws on equity referred to as a separate class of accounts as they are a class of transactions reducing the balance of the accounts. 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.
