double entry question

[Terry Boon]

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On Fri, Mar 23, 2001 at 07:07:20PM -0500, Michael P. Soulier wrote:

>     I noticed in April's Linux Journal that the initial balance of
> one's bank account would come from a corresponding equity account,
> but the article did not define where the initial balance in the
> phone bill would come from. If I'm just starting to use gnucash and
> I have an outstanding phone bill, credit card balance, etc., where
> does that balance come from?

In the same way, that comes from an equity account.  When I first
started using gnucash, I created one equity account and used that for
all the journal entries which set up my "initial state": that worked
fine.

>     Also, would the amount on a bill be a positive or negative value? 

It would be a credit balance, ie a balance on the right-hand side in
the register of the "bills payable" account.  (Because of the double
entry, it will appear on the left-hand side of the register window for
your equity account.)

Gnucash does not always use the standard "debit" and "credit" labels
for the columns of the register windows: instead, it can give them
names which are intended to be more meaningful for that type of
account.  To get back to the standard labels (if you want them), tick
the "Use accounting labels".

Whether this appears as positive or negative depends on whether you
are reversing the signs of any accounts -- this is specified in the
Settings-Preferences dialog box, under "reversed balance account
types".  If you do not reverse any signs, then the outstanding amount
on a bill should be negative.

- -- 
Terry Boon, Hertfordshire, UK
terry@counterfactual.org 

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