I understand this answer, and agree that double-entry accounting does not need to be 'daunting', but I don't really agree that the typical 'basic' personal finance user is mostly going to make simple entries that credit a bank account and debit an expense account simply to record purchases. Here are just a few examples of 'basic' personal finance transactions for most users and require more thinking about how to record debits and credits correctly:
1. Receiving a paycheck (typically will require crediting an income account, and debiting various tax expenses, and possibly debiting 401(k) or similar asset accounts, along with one's bank account) 2. Transferring money between bank accounts 3. Making a mortgage payment (which probably requires crediting a bank account and debiting each of an interest expense account and a mortgage liability account) 4. Recording interest or dividend income on investment asset accounts 5. Selling an asset for a profit, which has been the source of dozens and dozens of recent emails as people argue about how to record this correctly in DE accounting. Note that it's often the 'side issues' that appear to introduce the complexity. This was the shipping cost in the most recent 20-email thread, but has also been foreign exchange issues or other ancillary items. And some of us have noticed that it's often a lack of basic understanding of debits & credits that trips people up on these 'side issues'. From there, things can start to get more nuanced (how do you want to record credit card balances, do you submit expense reimbursements to your company, do you lend small amounts to family members/friends and want to record, at what level of specificity do you want to track your investments, do you use health savings accounts or the like, do you want to track and depreciate other assets like personal vehicles, do you lease your car, etc etc etc.) So, to me it's a both/and: 1. Familiarize yourself with DE accounting principles before moving over from Quicken or other personal finance tools that don't introduce/use DE accounting principles; 2. Ask here for tricky use cases On Sat, Nov 23, 2024 at 12:40 PM Phyllis Bruce <pobruc...@gmail.com> wrote: > Thanks, Mr. Losey for getting this particular ball rolling. I don't have > an accounting degree but I was a budget analyst for many years using > various computer programs. It is not necessary for many users to > understand double entry accounting in order to use Gnucash. > > Whenever you spend money, you identify the source of the money (your bank > accounts or credit cards or cash from your wallet.) Those are your assets. > You also identify what you spend it on and those are your expense accounts. > You can usually identify one type of expense for each time you spend your > money and that is called a transaction. The money out will equal the item > cost. > > Sometimes you want to be more detailed about your cost and that is where > splits come into play. Maybe you went to a gas station and purchased both > gas and some groceries. You have one expense from your assets (the total > spent), and two "incomes" to your expense accounts - an increase in money > spent on gas in one split, and an increase in food cost in the other. The > two splits will equal the money spent. > > That is the very basics of double-entry accounting and ignores equity if > you don't care about it. My gnucash file has only the starting balances of > my bank accounts and cash, and the starting balances of my liability > accounts - credit cards or loans. These are the balances that existed the > day I started using Gnucash. They include any unreconciled expenses in my > checking accounts and in my liability accounts. All of these transactions > were entered with their original dates so that I could balance the accounts > when I received statements. > > I hope this helps using Gnucash less daunting. Start with a practice file > and see how that works. Then you can create your good file to go forward. > Any time I was trying something different in Gnucash, I would first play > with it in my practice file. > > Pobruce > > On Sat, Nov 23, 2024 at 8:16 AM R Losey <rlo...@gmail.com> wrote: > > > I changed the subject because I want to start a discussion regarding the > > below comment, which regularly appears in this group (I am not throwing > > rocks at Stan). > > > > Sometimes, it is not a matter of understanding double-entry accounting or > > bookkeeping, but much more "how is this commonly done?". This group, at > > times, seems to throw out the "go learn double-entry bookkeeping" or > "read > > the manual" just a shade too often, when some people may just want to > know > > "How is -X- usually done?" (Look, I know it is tricky due to different > tax > > requirements, how detail-oriented the person wants to be, and the > > flexibility of GnuCash to accomplish something in multiple ways, to name > a > > few). > > > > As an example, consider Equity. From a brief look through the Tutorial > and > > Concepts Guide, it doesn't seem to be mentioned a lot (I didn't see a > > search, but I looked at likely areas). > > > > Perhaps it is a general accounting concept to close out the books by > > zeroing income and expenses into equity, but I didn't know that until it > > was mentioned here. I am very grateful to this list for learning about > ways > > to make this happen. I could have just been told to "go learn more about > > accounting", but a few ideas about how to record such events was > incredibly > > helpful. > > > > > > On Fri, Nov 22, 2024 at 2:40 PM Stan Brown (using GC 4.14) < > > stan...@fastmail.fm> wrote: > > > > > What Flavio _does_ really really need, in my opinion, is to read > Chapter > > > 2 of the Tutorial and Concepts Guide, and read it again until he's > > > mastered it. He would save himself a lot of confusion if he would get > > > absolutely clear in his head about debits versus credits, and the > effect > > > of a debit or credit on each type of account. Instead, it seems > > > to me that he's just throwing splits together and then asking on this > > > list about one transaction after another. Asking about every tree is > not > > > an efficient way to learn about the forest. > > > > > > GnuCash isn't hard to use, as software goes, but it's not very > forgiving > > > to folks who just dive in without understanding double-entry > bookkeeping. > > > > > -- > > _________________________________ > > Richard Losey > > rlo...@gmail.com > > Micah 6:8 > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. 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