[Features for gnucash-1.6?]]

[rob@myinternetplace.net]

Rich Shepard writes:

 > Double-entry actually makes more sense than alternative systems
 > when you stop to think about it. Every addition to your checking
 > account must come from somewhere, correct? So, when you make a
 > deposit in the bank and record it in gnucash, you specify the
 > _source_ of the money (salary, refund, miscellaneous income, etc.) 
 > and the _destination_ (checking, savings, etc.). That's the double
 > entry.

I understand that part of it, but I get confused as I move beyond
further on.

Can I just _create_ $$$ in the source account?  Since checking (or
savings, or misc. income) is an asset, I must credit it to make it
bigger, right?  Hrrmmm...  What is the magic formula again?  Assets =
Owner's Equity + Libilities ???  

So as an asset gets bigger, I gotta make OE bigger, too, right?  Do I
have a 'salary OE' account, which I credit (but since it is on that
side of the "=", i debit it to make it bigger, no?)  So I must debit
the 'salary OE' account, then, to show that I made $$$.

Is that close?

 > For every expenditure, you record the _source_ (checking, savings,
 > petty cash, etc.) and the _destination_ (i.e., account) of the
 > recipient (groceries, mortgage, sports equipment, etc.). You
 > probably already do this on your manual bookkeeping, but you do it
 > either mentally ("I know that this payee represents an insurance
 > expense") or in the memo field of the check.  Double-entry
 > bookkeeping means only that you are forced to do the same
 > source-destination recording for every transaction.

That's cool.  I think that I understand it some more now that I
remember that the whole magic formula thing exists.  I wish I could
remember which accounts go on which side of the magic formula, and
whether you credit or debit which ones at which times.

rob