Managing U.S. Flexible Spending Accounts

Yawar Amin yawar.amin at gmail.com
Mon Jan 4 19:24:48 EST 2010


Hi,

On 1/4/10 2:51 PM, Thomas Scofield said:
>
> I am a new user of GnuCash, and someone who has not had an accounting
> course of any kind.  (On the other hand, I am a mathematician, and the
> basics of double-entry accounting seem fairly intuitive if I can ever
> get the principle behind the labels "credit" and "debit".)

I was fortunate enough to come across the following expanded accounting
equation once in an accounting 101 textbook and from then on never had
any trouble with debits and credits.

The accounting equation:

A + E + D = L + OE + K + R

Where A = Assets
 E = Expenses
 D = Drawings (by business owner)
 L = Liabilities
 OE = Owner's Equity
 K = Contributions (by business owner)
 R = Revenues

Everything on the left side of the equations increases when it's debited
(and decreases when it's credited)
Everything on the right side of the equations increases when it's
credited (and decreases when it's debited)

I use the AEDLOEKR mnemonic to remember which is which (just say the
letters several times, they roll off the tongue fairly easily).

HTH,

Yawar


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