No double entry needed

[Derek Atkins]

Hi,

Please continue to CC gnucash-user...  There are other users who would
benefit from this discussion.

timex at dsl.ca writes:

> Hi Derek:
> 
> Thanks for that information.  
> 
> Still not convinced about the double entry stuff.  In my two years of 
> accounting almost 30 years ago, I didn't see the point then, and still 
> don't.  Guess that's one reason that I'm not an accountant, eh?  I mean, I 
> know there's a good reason if you are General Motors or something, but 
> for me?  Seems like twice the work for no appreciable gain.

The benefit of using a program like GnuCash is that you DON'T have
twice the work.  You only enter a transaction once and it gets
automatically entered as a credit to one account and a debit to the
other.  The appreciable gain is a clean understanding of your cash
flow as you clearly watch the transactional flow of assets from
income -> cash -> asset -> cash -> expese.

> Anyway, if it has to be, then it has to be.  Now, I hope you don't mind if 
> I pick your brain a bit now and then.

Well, I'd ask that you ask the list... There are a number of people
who can help, and I'm not always available.

> My latest enquiry is:  If I want to keep track of my medical expenses for 
> my taxes too, would I set up an account Expense: Medical, then when my 
> insurance company sends me a cheque put it in Assets: Cash?  Are those 
> the two entries that charge off against each other, or is there another 
> step here? *sigh* You can tell that I'm not really good at this, I guess . . .

Well, it depends.  Yes, you should have an Expense:Medical account,
and transfer from cash -> E:M for your medical expenses.  However,
insurance payments offset those expenses.  I'm not 100% sure how to
account for that (I would ask an accountant ;)

Logically, the insurance payment to you is an Income:Reimbursed Expenses
and probably goes from I:R-E -> Cash....  But I'm not 100% sure.

One way to look at it is to watch the cash flow and account for each
change-of-hands of every dollar.  However that doesn't always work,
because some things need to be accounted even if there is no REAL change
of money.  But for personal use it's not that stringent.

Hope this helps,

> thanks again,
> ~marilyn

-derek

> On 1 Apr 2003, at 23:30, Derek Atkins wrote:
> 
> > timex at dsl.ca writes:
> > 
> > > Hi:
> > > 
> > > I was trying out gnucash for the first time and have no idea if I can do
> > > what I need to with it.  first of all, I don't need a double entry
> > > system.
> > 
> > You may not NEED a double entry system, but you'll be much happier
> > if you have one.  Once you understand double-entry, you'll never want to
> > go back.
> > 
> > > I rent some rooms in my home and need to make one account just to keep
> > > track of rental income.  I need one other account to keep track of house
> > > expenses.  Can I do this somehow?  If not, can someone recommend a
> > > program to accomplish that?
> > 
> > Gnucash can do that in its sleep....  Create you Income:Rental and
> > Expenses:House accounts, as well as your Assets:Cash account, and then
> > transfer from I:R -> A:C when you get your rent checks, and A:C -> E:H
> > when you pay for expenses.
> > 
> > > Thanks . . . 
> > > Granny
> > 
> > -derek
> > 
> > -- 
> >        Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
> >        Member, MIT Student Information Processing Board  (SIPB)
> >        URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
> >        warlord at MIT.EDU                        PGP key available
> > 
> 
> 
> Cybercrone
> http://homepages.dsl.ca/~timex/
> Hm-m-m-m . . .
> Some people cause happiness wherever they go;
> others, whenever they go.  --Unknown
> 

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available