Equity Question

[Maf. King]

On Wednesday 19 August 2009 13:00:26 dude man wrote:
> Thanks for replying Maf.
>
> It kind of makes sense now.  What I don't think I understand properly is
> the equation Assets - Liabilities = Equity
>
> >From my account view I see my assets add up to $1000 (for example).  They
> > did add up to $1500 before I used one of my accounts to pay my Credit
> > Card (which had expenses of car and groceries) of $500
>
> So my starting Equity was $1500 and according to the equation it should add
> up $1000 but it still displays $1500.
>
> That is what I don't understand.  I guess you can tell I'm not much of an
> accountant :)
>
>
>
> Thanks for your time and help
>
>
>
> Chris
>

Hi Chris,

Don't forget to reply to the list, so that others can chip in when I lead you 
astray...!  (I've cc'd this reply to the list).

Hmm, what "still displays $1500"?  The balance of the "Equity" account 
sub-tree (it probably should), the report (it probably shouldn't), or 
something else?

Don't forget that the accounting equation can also include income & expenses, 
something like Equity + (Income-Exps) = Assets - Liabilites, and even before 
you paid it off, the credit card balance was a liability already.

IANAA either, and I think that Josh's reply to my earlier post was a bit more 
succinct!

Maf.