Mike or Penny Novack
stepbystepfarm at mtdata.com
Fri Sep 12 12:59:18 EDT 2008
>Generally the top level of your chart of accounts (account tree) contains
>only those four account types.
Three, not four ........assets, liabilities, and equity.
Income and expense are both temporary accounts of fundamental type
equity. Their purpose is to provide information for the current period
and show the totals of these most important sources of CHANGES to equity.
In other words, DURING the accounting period likely to be leaving equity
entirely alone with the transactions (in reality altering equity) being
recorded as either income or and expense. At the end of the period,
these are closed into equity as the net gain or loss for the period and
the next accounting period begins with all income/expense accounts
zeroed out --- which is why I described them a "temporary".
>But why make the user build the most common
>account types themselves? GnuCash just has them already built for you (like
>Quicken). Besides, there isn't currently an option to add your own account
>types anyway. Also, there are some differences in the way account types are
>treated. I'm not familiar with the exact differences between all of them.
>For example, stock and mutual fund types get a "price" column in their
>registers, and can be denominated in non-currencies. However these two
>account types are currently identical in all but name. So the distinction
>between "stock" and "mutual fund" assets are unknown to the software, and in
>fact these account types could be used to track any asset at all that needs
>a price column. These two account types could be made distinct and more
>useful if the GUI treated them differently. (For instance, options to
>distribute capital gains could be enabled for mutual fund accounts, but
>disabled for stock accounts.) There is lots more work to be done in the
>I can't speak to the other account types. Some of them might be the same in
>all but name, too.
>>I may not have been using GnuCash long enough to appreciate the
>>differences, but it would enhance my understanding of the product if I
>>had a better idea as to why these distinctions are made.
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