Alison,
GnuCash is a double entry accounting system. Guncash has a number of basic
top level accounts:
Assets
Liabilities
Equity
Income and
Expenses
Underneath each of these you need to create sub accounts appropriate to your
business needs. In the setup procedure to create a new data file/book there
is an option to select from preset account heirarchies. At the step, "Choose
new accounts to create" if you select the Business Accounts, Gnucash will
create a basic set of business accounts which can be customized to meet your
specific needs.
Each transaction you make involves at least two accounts - hence double
entry. For example when you sell something in the bakery you will increase
the value of the balance of an asset sub accounaccount ( a debit to that
asset account) and increase the value of an appropriate income sub account
(a credit to the income account).
When you are running a cash sales business you would normally use an
assetsaccount called something like Undeposited Funds which is a subaccount
of Current Assets which is in turn a sub account of Assets as the asset
account and a sub account of Income for Cash Sales. A sale of $25 would be
recorded as
Debit Credit
Asset: CurrentAssets: Undeposited Funds: 25
Income:Cash Sales
25
and you will have a similar entry for each sale. Alternatively at the end of
the day you may simply total up what is in the till and just create one
entry for the total amount instead of the $25 in the above entry.
When you go to the bank and deposit your cash from the till in the bank, say
you've had a good few days and have had a thousand dollars of sales, the
transaction to record this is
Debit Credit
Asset:Current Assets:Checking Account 1000
Asset:Current Assets: Undeposited Funds 1000
if you made a cash payment to a vendor of $100 for the purchase of some
flour from the money you were holding to put in the bank the transactions
would be
Debit Credit
Expenses:Flour 100
Asset:Current Assets: Undeposited Funds 100
If the use of debits and credits is confusing read the introductory section
of the GnuCash guide dealing with the accounting equation and debits and
credits and basic accounting concepts
https://www.gnucash.org/docs/v4/C/gnucash-guide/basics-accounting1.html.
There are also articles on Wikipedia on double entry accounting, the
accounting equation and debits and credits.
One point that always comes up is that your bank statements are prepared
from your banks books not yours so what is an asset for you is a liability
for them so debits and credits will be interchanged in your books from how
they are presented in a bank statement.
Hope this helps with getting you started.
The Help manual https://www.gnucash.org/docs/v4/C/gnucash-help/help.html and
the Tutorial and Concepts Guide
https://www.gnucash.org/docs/v4/C/gnucash-guide/ are well worth reading even
though it is often hard to take time out. once you have an idea of the
overall layout you will be able to dip into them as needed.
David
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David Cousens
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Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
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