how to show stock trades?

[James LewisMoss]

>>>>> On Thu, 16 Aug 2001 02:16:49 -0700 (PDT), Nikunj Bansal <nikunj@yahoo.com> said:

 Nikunj> Hi fellow Gnucashers, I am using Gnucash 1.6. I am confused
 Nikunj> about the following:

 Nikunj> Suppose I buy a stock and sell it later for a profit of say
 Nikunj> $100. How could I set up the various accounts so that my
 Nikunj> balance sheet does not go out of whack.  Right now, the way
 Nikunj> my accts are set up my Assets != (Liabalities + Equity). I
 Nikunj> figured that it is because I am not showing the Profit/Loss
 Nikunj> made on the pair of stock trades. Basically, my available
 Nikunj> cash went up without an Income account to feed it from.

 Nikunj> Please help and I would be happy to provide more info.

Here's how I do it.  I think this is pretty correct someone correct me
if not.

I have one account "Stock Trading Account" (in my case it's "Etrade
Stock Trading" or somesuch).

I create an account for each stock I buy.  So say I'm buying "Foo
Company" stock I'll create a "Stock/Foo" account.

When I buy 100 shares at $1 I create a transaction that
1) Removes $100 from "Stock Trading Account"
2) Adds 100 shares to "Stock/Foo".
3) (and actually it removes $119.95 from "STA" and transfers $19.95 to
   a "Stock Trading Expense" for the fee.

So when I sell those 100 shares for $2 (Woo what a profit!  Wish I had
bought more.)  You create another transaction.
1) Remove 100 shares from "Stock/Foo" this time at $2/stock.
2) Adds $200 to "Stock Trading Account"
3) and same as 3 above except it's 80.05 to "Stock Trading Account"
   and $19.95 to "Stock Trading Expense".

As far as I know an income account is not the right thing for this
situation. 

Hope this helps (and is correct)
Jim

-- 
@James LewisMoss <dres@debian.org>      |  Blessed Be!
@    http://jimdres.home.mindspring.com |  Linux is kewl!
@"Argue for your limitations and sure enough, they're yours." Bach