Questions About Investment Accounts

[Buddha Buck]

You have two asset accounts: Assets:Checking and
Assets:Investments:MCapital, and one income account
Income:Investments:MCapital

When MCapital tells you she has income from her investments, you record it
in a transaction like:

2013-01-01 Investment Income
  Assets:Investments:MCapital debit $200
  Income:Investments:MCapital credit $200

When MCapital sends that money to her checking account, you record it in a
transaction like:

2013-01-15 Transfer from MCapital to Checking
  Assets:Checking debit $150
  Assets:Investments:MCaptial credit $150

The end result of these transactions is that the checking account will have
gone up by $150, the investment account will have gone up by $50, and the
income recorded will be $200.



On Sat, Apr 6, 2013 at 11:50 AM, Mark Phillips
<mark at phillipsmarketing.biz>wrote:

> Thanks for all the great input. I have one more question.....
>
> How do I handle the Investment account sending money to my mom's checking
> account?
>
> What I have now, is
> Assets:Checking = $200
> Income:Investment Income=$200
>
> I think I have to have something like this:
>
> Assets:Investments:MCapital = -$200 (eg the money is coming from here)
> Income:Investment Income = $200
>
> but how do I get the money into her checking account?
>
> Thanks,
>
> Mark
>
> On Fri, Apr 5, 2013 at 8:15 PM, John Ralls <jralls at ceridwen.us> wrote:
>
> >
> > On Apr 5, 2013, at 10:23 AM, Ian Konen <iankonen at gmail.com> wrote:
> >
> > > On Fri, Apr 5, 2013 at 12:22 PM, Derek Atkins <warlord at mit.edu> wrote:
> > >
> > >> Hi,
> > >>
> > >> Mark Phillips <mark at phillipsmarketing.biz> writes:
> > >>
> > >>
> > >>>
> > >>> How do I enter these values into gnucash? I don't think I should have
> > an
> > >>> expense account for Additions and Withdrawals or an Income account
> for
> > >>> Income, as these transactions never leave this account. I am really
> > just
> > >>> interested in see the net change in this account on my balance sheet,
> > and
> > >>> not have the expenses and income go through my income statement.
> Would
> > >> all
> > >>> the offsetting entries be to some equity account? I think I am really
> > >>> missing an important concept here.
> > >>
> > >> Yeah, if you want to see the change in value without recording the
> > >> income or expense then you need to keep track of your shares and see
> the
> > >> delta-V by changes in price.
> > >>
> > >>
> > > Well now I'm confused.  I don't think I was wrong to say "the
> accounting
> > > equation is a mathematical identity", but it does seem like that
> > > contradicts your answer, at least in this example.  Isn't an increase
> in
> > > share prices of a stock you own an income whether you realize the gain
> or
> > > not?  I haven't used commodity / share prices in GnuCash myself and
> > hadn't
> > > though about the implications of changing values, but it seems like you
> > > could unbalance your books if you don't record the value change as
> coming
> > > from an income account.
> >
> > You're right and so is Derek.
> >
> > The key is that  "current value" and "book value" are different. Book
> > value (also called "basis") is what you paid when
> > you bought the security. Current value is what you would have gotten had
> > you sold the security at the price of its most
> > recent trade. The difference between the two is the "unrealized gain or
> > loss".
> >
> > If you maintain a separate account for each security and maintain the
> > price database with its current price then Gnucash
> > will report the current value on the Accounts page and in the portfolio
> > reports. That's separate from the book value, which
> > is what's reflected in the register and on the business reports.
> >
> > So, for the OP, here's how to fake it: Create a bogus security to
> > represent all of the securities in your brokerage account.
> > You can manually insert fake prices for the bogus security in the Price
> > Editor, and the Accounts page will show the
> > changing current value of your account as you want. It's utterly useless
> > for anything else, and arguably more work than
> > actually creating the securities sub-accounts and letting F::Q retrieve
> > the prices for you, but that's a way to do what
> > you're asking for.
> >
> > Just don't show it to your accountant or tell anyone I had anything to do
> > with it. ;-)
> >
> > Regards,
> > John Ralls
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