I have not been saying need to know much about double entry bookkeeping
TO GET STARTED USING GNUCASH and the new user won't have to do much with
equity beyond opening entries if never "closing the books" << much
EXPLICITLY with equity -- accounts of type "income" and "expense" are
actually type equity temporarily kept separate
(their net DOES show up under equity in the Balance Sheet report*) >>
BUT (and this is a big but) the questions we get on this list are not
about how to enter "I went to the convenience store and spent $X on gas"
or even "I went to the convenience store and spent $X which was $Y on
gas and $Z on food".
In other words, sooner or later will have a transaction to enter NOT so
simple, will ask how, and NOW "you have to be willing to learn the
basics of double entry bookkeeping".
Phyllis, there is nothing wrong for using gnucash for keeping just
PARTIAL books as you seem to be doing. There is even a name from the old
days for what you are doing, aka a "cash book".
Michael D Novack
* The item under equity "retained earnings" or "retained losses" is
actually "retained net of all income and expense accounts" -- earnings
if credit and losses if debit
On 11/23/2024 12:38 PM, Phyllis Bruce 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
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