[Features for gnucash-1.6?]]

[linas@linas.org]

It's been rumoured that rob@myinternetplace.net said:
> 
> 
> 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?  

No. Never.  The initial balance of your savings account is a transfer 
from an 'equity' account.  Grand total is 'zero': the money didn't
appear out of thin air.

> Since checking (or
> savings, or misc. income) is an asset, 

Income is not an asset; its very different. When you get paid on payday, 
you transfer from an 'income' account to the bank account.  But now you
get it: the 'total' is still 'zero'; the transfer was just a movement of
money from here to there.

> I must credit it to make it
> bigger, right?  

Don't sweat the plus & minus signs. Gnucash will get them right. 
And if you want to change the sign, there's a preference menu 
that allows you to reverse the meaining of 'debit' and 'credit'
if it makes you happier. The math always comes out in the end.

> Hrrmmm...  What is the magic formula again?  Assets =
> Owner's Equity + Libilities ???  

At the start of the year, yes.  But somewhere in the middle,
Assets = Income - Expense + Owner's Equity at start of year + Liabilities 

> 
> So as an asset gets bigger, I gotta make OE bigger, too, right? 

Yes, although a better way might be to ttransfer from an account of type 
Income (and not equity) , called 'unrealized gains'.

> I
> have a 'salary OE' account, 

Salary might be better treated as a 'income' not an 'equity' account
type.

(At the end of the year, you transfer *everything* out of income &
expense to equity, and that way, start with zero income/expense
 for the new year.  there are a variety of reports that will be 
happier if you do it this way, instead of transfering to equity 
every day or every week.)

> which I credit (but since it is on that
> side of the "=", i debit it to make it bigger, no?)  

Don't sweat the signs.  It all works out.

> So I must debit
> the 'salary OE' account, then, to show that I made $$$.

Use the preference menuu to reverse debit/credit on that account type,
if it makes you feel better.  It only affects the display of the values,
not the math.

--linas