New user - Imbalance question

ThreeMarks marc.d.r.thompson at googlemail.com
Thu Dec 30 10:47:39 EST 2010


This may be a general accounting question rather than a GNUcash question.

I've started using GNUCash and I've created a Business Account. So, let's
say I want to start my accounts by recording a personal investment. So, I
enter £1000 into one of the accounts. 

I'm very new to accounting also, but I'm guessing that this would proably
fit into Equity -> Opening Balances (I'd appreciate it if somebody could
suggest a more accurate account if I've gotten this wrong). Now, I'm aware
that GNUCash is a double-entry accounting system (I've come to an
understanding on this phrase), which means that this initial £1000 must come
from somewhere.

What I don't understand yet, is how this initial entry can give me a
negative balance of -1000, since this is money coming into the business from
the start. In this light, I'd be grateful if someone might explain how I
handle this in GNUCash. Am I wrong in saying that my account grand total
shuold be £1000 (to begin with)? If not, for the 'Transefer' entry of this
transaction, how do I manage that this amount has come from an 'external
source'?

Thanks.
ThreeMarks.
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