Best way to organize accounts
Firebird
phnix at fastmail.net
Wed Aug 23 00:37:26 EDT 2006
I think your problem here may be a misunderstanding of how gnucash accounts
are set up and the like. Your "Checking Account" for instance should be an
asset. Every transaction you make with your checking account should in some
way pass through that account and when you get your statement it should
reconcile easily. However, since gnucash intreprets everything as an account,
all those transactions will also appear in expense accounts, income accounts,
or transfers to other asset or liability accounts (like paying off credit
cards or putting money into savings and investments). All of this works to
balance the accounting equation. For example, if you go and spend $10 on
lunch, that would be a debit to your checking account and a credit to perhaps
your Expenses:Dining Out account. Most other accounting programs use
catagories for income and expense and this can cause confusion when doing it
the gnucash way since you have to actually set up accounts that "don't exist"
in the real world. However, when you can see all your money as just transfers
between different accounts, it can get a lot clearer. Take a look through the
concepts guide (http://svn.gnucash.org/docs/guide/) for a better
understanding of all this. It does much better justice to it than I can. =)
Good luck,
-Kyle Bishop
On Tuesday 22 August 2006 18:17, eschvoca wrote:
> >From what I can determine there are two fundamental ways someone can
>
> organize their account trees:
>
> 1) Use transaction types at the top level (Assets, Equity, Expenses, Income
> Liabilities)
>
> 2) Use real-life grouping at the top level (Checking Account, etc)
>
> In (1) if your real-life Banking Account has Assets, Expenses, and
> Income then you could have a separate Gnucash Banking Account under
> those top level accounts. In (2) Banking Account would appear once at
> the top-level and it could contain sub-accounts of Assets, Expenses,
> and Income. Whatever is at the top level it is easy to get a summary
> for all subaccounts.
>
> Currently I've setup my accounts using form (1) but find that I can't
> reconsile my statements because there is no overall balance for my
> bank account. I'm tempted to do the big switch to form (2) but I
> thought I first check with people to see what their suggestions are.
> If I go with (2) can I still get my total income somehow (e.g. from a
> report)?
>
> What do people recommend?
>
> -E
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