New user - Imbalance question

[jomali]

I'm not an accountant, but to use Gnucash, I've had to try to wrap my head
around accounting concepts. First, I look at the Accounting Equation,
Assets - Liabilities = Equity
I see Assets as what I own and Liabilities as what I owe.
Therefore Equity is simply what I have left over after I satisfy my
liabilities.
When initializing Gnucash, we want to record our opening balances in our
various Asset and Liability accounts. To do so, we enter the opening balance
in those accounts and balance them with a corresponding equity account
(usually opening balances). That keeps the accounts in balance.
Unfortunately, you and others seem to start with the Equity account.
I would suggest that you determine which of your Asset accounts receives
your £1000, and balance that with the Equity: Open Balances account.


On Thu, Dec 30, 2010 at 10:47 AM, ThreeMarks <
marc.d.r.thompson at googlemail.com> wrote:

>
> 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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