Equity Question

[dude man]

Hi Michael

 

It displays the $1500 as the balance if the Equity account sub-tree (which I'm 
beginning to understand will never change)
Am I correct to assume that this is just used as a staring point to determine 
whether I am making a profit or loss

 

PS.  New to lists and didn't know that I needed to reply to all - will do. thanks

 

Chris
 
> From: maf at chilwell.net
> To: carnmightyhawks at hotmail.com
> Subject: Re: Equity Question
> Date: Wed, 19 Aug 2009 21:13:26 +0100
> CC: gnucash-user at gnucash.org
> 
> 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.

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