Stock gains/losses cause balance sheet imbalance

[Nikunj Bansal]

Fabien,

Thanks for the excellent explanation. I think I
understand what I am doing wrong now. The only
question I now have is how do I set up my accounts in
gnucash so that I can do this.

Thanks
Nikunj.

--- Fabien Ninoles <fabien@Nightbird.TZoNE.ORG> wrote:
> On Sat, Jan 05, 2002 at 07:43:57AM -0800, Nikunj
> Bansal wrote:
> > Charles,
> > 
> > Thanks for the response.
> > This is exactly where I am getting stuck in fact.
> I am trying to
> > strictly follow the double accounting. In fact, my
> balance sheet is
> > almost perfectly matched...  except that there is
> some flaw in the way
> > I am doing the stock trades. The balance sheet is
> off by exactly the
> > amount I lost in stock trades during the year.
> > 
> > This is how I am doing it. When I bought stock X,
> I show the money
> > coming from cash as the double entry.  Hence cash
> gets reduced by
> > $1000 and when I sold those stocks, say for
> $900... I do the reverse.
> > The cash now increases by $900 and stock numbers
> fall back to 0.
> > Now.. suddenly my assets (cash) has fallen by $100
> but there is no
> > corresponding Income/Expense to reflect this and
> hence the balance
> > sheet is off. I have been struggling with how to
> do this correctly.
> 
> You stocks doesn't decrease by 900$ but by 1000$,
> 900$ going into your
> cash account, and the others 100$ into the Capital
> Lost (expense).
> 
> In contrary, if you gain 100$, buying at 1000$ and
> selling them at
> 1100$,  you'll be decreasing your stock by 1000$,
> increase your Capital
> Gains (income) by 100$, and increase your cash
> account by 1100$.
> 
> Another way will be to make a first transaction
> representating the
> gain/lost between the Stocks account and the Capital
> Gain/Lost account
> and another one representing the selling itself,
> between the stock and
> cash accounts.
> 
> > Can u suggest in more detail.
> > 
> > Thanks
> > Nikunj.
> 
> Hope this help.
> BTW, I'm just an amateur,
> not a professionnal.
> Fabien
> --
> Fabien Niņoles                                      
>         
> fabien@tzone.org                
> http://www.tzone.org/~fabien
> GPG KeyID: C15D FE9E BB35 F596 127F  BF7D 8F1F DFC9
> BCE0 9436


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