double entry question
Michael P. Soulier
msoulier@storm.ca
Sat, 24 Mar 2001 10:44:50 -0500
On Fri, Mar 23, 2001 at 10:36:52PM -0500, Wesley Sheldahl wrote:
Hi Wesley,
> I'm not an accountant either, but here's what I did.
>
> When I set up my accounts, the Equity part looked something like this:
>
> Equity
> |____Retained Earnings
> |____Retained Losses
That makes sense...
> For opening balances on Asset accounts, like checking and savings, I put
> matching transactions in Retained Earnings. For opening balances on
> Liability accounts like credit cards and loans, I put matching transactions
> in Retained Losses.
So in both cases it looks like a withdrawl from the equity account and a
deposit into either a bank account or a liability account? Doesn't that leave
the equity permanently in the negative, or does gnucash take into account the
type of account you transfer to?
> For things like the phone bill and any other bill that routinely gets paid
> in full, I generally don't enter it until I pay it. Then one entry goes in
> the checkbook, one goes in the corresponding Expense account. If you
Right...
> wanted to pre-record it, my guess is you would have a Liability account
> called something like 'Accounts payable'. When a bill comes, you would
> enter it in accounts payable and in the Expense category. When you pay the
> bill, you would enter it in your checkbook (or whatever Asset account the
> money is coming from) and the 'Accounts payable' category, so that for that
> rare moment when every bill is paid, your Accounts Payable is zero.
Hmm. So if I was anticipating the bill, enter it in accounts payable
(liability account) and transfer from an expense account? If I then transfer
from my chequing account to the accounts payable, it doesn't seem like the
expense account would balance.
Mike
--
Michael P. Soulier <msoulier@storm.ca>
"With sufficient thrust, pigs fly just fine. However, this is not necessarily a
good idea. It is hard to be sure where they are going to land, and it could be
dangerous sitting under them as they fly overhead." -- RFC 1925