Basic concept question on "Basic Accounting Equation"

Duncan Thomson clymbon at gmail.com
Thu Feb 25 11:55:30 EST 2010


The "GnuCash Tutorial and Concepts Guide" provides the following as the
"Accounting Equation"

*   Assets - Liabilities = Equity + (Income - Expenses)*

But that seems wrong.  It is equivalent to

*   Equity = Assets - Liabilities - Income + Expenses*

That would imply that as my income goes up my equity goes down, and as my
expenses go up my equity also goes up.  I wish that were true!

Am I missing something?

- Clueless accounting newbie


More information about the gnucash-user mailing list