On 2/21/21 5:45 PM, Stan Brown wrote:
On 2021-02-21 15:22, gnu Gord wrote:
I'm unsure of the best way to record the adding/modifying of an asset.
Should the transaction go directly to an asset account or an expense
account then create an asset? Let me explain.
I started writing out a detailed reply, but David Cousens said it all
well, and rather than just pile on I will say that I agree with what he
said.
I'll add one thing: if you find yourself asking "should I record a
transaction to equity", the answer is almost certainly No. Changes in
your net worth arise from income and expenses, so they should be
recorded in the appropriate Income or Expense accounts.
Buying an asset doesn't change your net worth, and therefore it is not
income or expense; the same is true of paying a bill or paying principal
on a loan. (The interest portion of a loan payment is an expense; the
principal portion is just a debit to a liability account.)
This page has become a reference page for me -- unless my wife is around
and then it is easier to ask her.
https://www.accountingtools.com/articles/2017/5/17/debits-and-credits
The summary: Credits go next to the window -- just gotta remember which
chair I need to set in when making that amazing discovery. <<window to
right when facing computer screen>>
Debit Accounts -- increase in value on a debit entry: Assets, Expenses,
Losses. Note that a credit to these accounts reduce value.
Credit Accounts -- increase in value on a credit entry: Liabilities,
Equity/Capital, Income/Revenue, Gains. A debit to these accounts
reduces value.
--
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.
