User Advice Needed - Restructure Expense Accounts

[Mike or Penny Novack]

>
>Question: When I started using GnuCash I was a W2 employee and my accounting
>was entirely personal. Two years ago I started my own business (a single
>proprietor LLC) and continued to use my preexisting GnuCash accounts. I
>would like to restructure my income and expense accounts to better reflect
>personal vs. business accounting. What is the best way to do this? Do I just
>create a new file and copy balances and transactions since January 1, 2009?
>
>
>Thanks
>  
>
Normally you (personal) and the business would have separate books even 
though you are the sole proprietor of the business.

Money you as the owner take from the business are traditionally known as 
"drawings" and are in effect decreases in your investment in your 
business (partnerships work the same way).

In other words -- say a check drawn on the business account is deposited 
in your personal account. On the books of the business that is a credit 
(decrease) to the checking account and a debit (also in effect a 
decrease) to the business capital account -- being an equity account 
it's on the opposite side of the ledger. Meanwhile that's a debit 
(increase) to you personal checking account and a credit (in effect a 
decrease) to your asset "business that I own" -- they are both asset 
accounts and hence on the same side of the ledger.

You really want to get a book with a title like "Accounting for the Sole 
Proprietorship".

Michael

-- 
There is no possibility of social justice on a dead planet except the equality of the grave.