David,
That's where this all started.
It didn't make sense so I thought I would ask people who were more
knowledgeable.
I did look on line and nothing on line made any more sense.
So, thank you for your help.
Best regards,
Neal Lewis
On 8/31/22 3:55 AM, David T. wrote:
I'm surprised no one has mentioned
https://www.gnucash.org/docs/v4/C/gnucash-guide/basics-accounting1.html#basics-accountingequation2
That's the Tutorial & Guide page that explains the concept.
David T.
On August 31, 2022 10:15:04 AM GMT+03:00, Gyle McCollam
<gmccol...@live.com> wrote:
Neal,
Your welcome. I see a few others have responded with similar thoughts and
explanations. I'm sorry I forgot to respond to all, so the list did not see my
original email, but as I said other replied with similar answers, but in more
detail.
Don't worry, I trust you will get there. I'm sure there are engineering
concepts that we accountants would not understand immediately. The key to this
is that at any point in time (Income - expenses = 🔺Equity). So if your income
and expenses aren't zero (close Books at the end of the year), you have to add
this expression to A=I (+/-) Eq to get it to equal.
Thank You,
Gyle McCollam
Gyle McCollam
gmccol...@live.com<mailto:gmccol...@gyleshomes.com> email
------------------------------------------------------------------------
From: W. Neal Lewis<wnle...@southwind.net>
Sent: Tuesday, August 30, 2022 9:24 PM
To: Gyle McCollam<gmccol...@live.com>
Subject: Re: [GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?
Gyle,
Thank you for your reply.
Let me think about it for a while.
It does not yet make sense to my Engineering brain.
Sorry to be so dense, but terms as well as numbers must balance for an
equation to be correct.
Best regards,
Neal Lewis
On 8/28/22 6:28 PM, Gyle McCollam wrote:
At the end of the year I (income) - Ex (expenses) is your
increase/decrease, depending on whether the number is positve or negative, to
equity for the year and at any given point during the year it is your
increase/decrease YTD equity figure. So realistically, when you added +(I-Ex)
and it should be minus Ex, you haven't really changed the equation A=L+Eq.
Thank You,
Gyle McCollam
Gyle McCollam
gmccol...@live.com<mailto:gmccol...@gyleshomes.com> email
------------------------------------------------------------------------
From:
gnucash-user<gnucash-user-bounces+gylemc=gmail....@gnucash.org><mailto:gnucash-user-bounces+gylemc=gmail....@gnucash.org>
on behalf of W. Neal Lewis<wnle...@southwind.net><mailto:wnle...@southwind.net>
Sent: Sunday, August 28, 2022 6:38 PM
To:gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org>
<gnucash-user@gnucash.org><mailto:gnucash-user@gnucash.org>
Subject: [GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?
I will agree that by mathematical logic, Assets-(Liabilities)=Equity. ∴
Assets+(Liabilites)-(Liabilities)=Equity+Liability, or stated more
simply, A=Eq+L. I have added Liability to both sides ∴ both sides remain
equal.
However, although (A+L)=Eq, (A+L)≠Eq+(I+Ex). I have added a term to the
right side that is most decidedly not on the left ∴ they cannot be equal.
∴ A and L must be terms that include other factors.
Not good at accounting, I will ask what those other factors are.
I want to use GnuCash but I am having trouble getting my mind to accept
an equation that is not correct unless terms are redefined.
Please help me with my (obviously) incorrect understandings.
Thank you,
Neal Lewis
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