On 5/4/2024 1:18 PM, Brian Higgins via gnucash-user wrote:
I really need to talk with someone to get this right. My equity
opening balance is $ 6802.59 ( close enough) on 1/1 24, and my check
register is $3892.258 on 1/1/24 and my petty cash is $5 on 1/1 /24, so
why does my equity account value on show up as equal to the assets? I
thought the equity account would show as the balance of all owners
investment in the business, and as a liability, and thus a negative
number. Would a bookkeeper or accountant who may not be familiar with
Gnucash be able to help me figure this out?
Note: I have returned the Equity parent account to placeholder, and I
see there is an Opening Balance Equity as a child account of that. So
really, is my opening balance equity just the total of my assets on
1/1/24, or is it a register snapshot of a capital account, as of Jan
1st, meaning all the $ I have shoveled into this turkey since day
one, starting back in 2021? I feel I should enter $ 6802.59, and I
think that goes on the credit side, ( an increase in GnuCash)) since
it is a 'special liability', where the bank account was debited that
amount, over time, in 2021. I am starting these books fresh as of Jan
1 2024.
Thank you, I just need some hands on help getting me started.
You need to get a grasp of double entry bookkeeping concepts, not just
"doing it using gnucash" as opposed to say "pen and ink on paper". The
tutorial might or might not be enough. If you need more on basics, seek
out a standard "bookkeeping or accounting 101" .text.
a) At the start, it might (or might not) forget all about negative
numbers. After all, double entry bookkeeping goes back to before
European math accepted negative numbers (yes, it IS that old). The
"senses" are debit and credit (not positive and negative)
b) Yes, if you have NO liabilities, then total assets (debit) equals
total equity (credit)
c) In a set of books, total debits will equal total credits. Easy to
see. The set of books starts out empty. Each transaction will have at
least one debit and one credit and the total debits on the transaction
will equal the total credits on the transaction.
d) The shortcut of allowing you to create accounts with "starting
values" has confused you by hiding the "c" (the underlying transaction).
You possibly would've been less confused had you been required to create
accounts at zero and then enter an explicit transaction to set the
initial value because then you would have SEEN the other side of that
transaction << the "starting balance" account under Equity >> This would
especially be true if this business had multiple owners.
Michael D Novack
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