Wow! I'm impressed and have a question
Dustin Henning
The00Dustin at gmx.net
Fri Jan 9 06:33:32 EST 2015
Your e-mail is lengthy, and I am concerned that it may not get
responded to due to that (as I often have the same problem), so while my
accounting background is limited, I will state what I know about how I
use the software.
1) When I create a loan account and write a check toward payoff, the
money goes directly from my banking account (typically checking) to the
loan account. This decreases the loan balance.
I'm not sure why you want to involve an expense account, so here are
some additional points from my experience / limited knowledge:
2) When I create an expense account to track money spent, the money
goes directly from my banking account (typically credit card) to the
expense account. When using a credit card, payments toward the credit
card would then go directly to the credit card account from another
banking account (as the expense was already accounted for).
3) The only time money comes out of an expense account for me is when I
get a refund and it goes back to a banking account.
I mention these additional points because, to the best of my knowledge,
money can only be in one place in this double-entry accounting system.
IOW, money paid toward a loan is not an expense. However, interest on a
loan is an expense, which actually brings up another point:
4) Each month, I move money from my loan account to an expense account
created to keep track of interest. This increases the loan balance and
the amount of expenses incurred.
On the off chance that anything above sounds wrong to you, it is
possible that you are trying to do something I don't understand, and it
is possible that you know how to do it right and are actually doing
something silly. To that end, I have one more bit of personal
experience that may be obscurely relevant:
5) I have two brokerage accounts which both kept track of money the
same way when I opened them. Specifically, deposits would come in
directly from relevant accounts (as in [1] above), income would come in
directly from relevant accounts (money transferred directly from income
accounts created to keep track of interest and dividends), and money
involving securities would transfer directly from my brokerage account
to/from the relevant securities (similar in a way to a revolving loan /
credit card). However, one of my brokerage accounts recently switched
to a different clearing house, and I cannot make any sense of the
nonsense I get in my qfx downloads from them. There seems to be
multiple accounts for cash and constant separate journal entries that
match other entries and make no sense to me. I've stuck with what I
understand and now manage that account manually instead of downloading
data for reconciliation.
I can't state for a fact that I am doing it right and/or that the data
file I get from that brokerage is wrong, but it is more complicated than
it needs to be, and I don't want to re-create my books to deal with it.
I suppose it is possible that every entry in that data file is
standalone, meant to apply to another entry in the same data file.
Perhaps this is how Quick Books output some of your data or dealt with
some of your accounts and this is where the confusion comes from, but
these thoughts are nothing more than grasping at straws.
One final thought, in case this didn't occur to you when reading my
comment (2) above, your loan balance should have come from an expense
account instead of an opening balance? If the money went into your bank
account, that would create the loan balance, so if the money didn't
enter your banking account, but is classified as an expense, perhaps it
would then be as if the loan account paid the expense and you were
paying the loan back. I mean, I think opening balances are for money
that existed when the book was created and not for money that came from
or went somewhere after that point. For instance, I don't have any
opening balance accounts because my first checking account is in GnuCash
from the beginning, and that account was $0 when I opened it, then I
deposited money from income.
Whether my rambling helped or not, good luck with the program.
On 1/8/2015 2:37 PM, Ron Nicol wrote:
> I can't thank the gnucash developers and this community enough for what
> you've created.
>
>
>
> You might find a little background amusing. I have been using Quicken for
> decades and even went back and entered all of my transactions from 1971. My
> Quicken data file is 250 MB. Over the last few years, when a new version
> has been released, I've had to reverse engineer things such as security
> price data history etc. This year the program locks up about once a day
> with no error messages. In my discussions with the Quicken support team I
> received little information of value. They scheduled a call for me with a
> higher level of support which required a week to schedule. In the meantime,
> I ascertained that the database was corrupted in April of last year. I
> completely restored the data by the time they called. I expressed my
> frustration and was told that my problem was that my data file was too big
> and that the only suggestion they had was for me to delete all of my history
> except for the last five years. Needless to say this was not acceptable.
>
>
>
> I have begun the journey to gnucash and love the proper accounting handling
> of the data. The qif import module is extremely well written and I've been
> amazed at how well it's importing over 40 years of data. Because of
> Quicken's lack of a robust accounting model I've had to change any
> self-referential transactions where money is transferred into the same
> account. Quicken has used this form of transaction for Opening Balances.
>
>
>
> Also, for those of you considering moving from Quicken to gnucash, I was
> surprised that the option to export all of the the accounts into a qif also
> included all of the investment accounts which Quicken supposedly doesn't
> support.
>
>
>
> The problem I've run into can be replicated as follows:
>
>
>
> 1. Create a loan in Quicken where the Loan Owed To Me with an opening
> balance of $18,000. Quicken properly creates an asset account called Loan
> Owned To Me.
>
> 2. Create an account called Checking with a $500 opening balance which
> represents the checking account.
>
> 3. Enter a $0 Test Transaction split transaction in the Checking
> Account register with the following splits:
>
> Category Amount
>
> Allowance $300
>
> [Loan Owed To Me] - $300
>
>
>
> My expectation was that the expense account Allowance would have increased
> by $300 and the [Loan Owed to Me] account would have been reduced by $300
> and had a balance of $17,700 and the Checking account balance would be
> reduced by $300 to $200 Instead gnucash recorded the following transactions
> (in transaction journal view):
>
>
>
> Account: Checking
>
> Date Description
> Tot Deposit Tot Withdrawal
> Balance
>
> xx/xx/xxxx Opening Balance
> 500.00
> 500.00
>
> Checking 500.00
>
>
> Equity:Retained Earnings
> 500.00
>
>
>
>
>
> xx/xx/xxxx Test Transaction
> 500.00
>
>
>
> Loan Owed To Me 300.00
>
>
> Checking
>
> Allowance
> 300.00
>
>
>
> xx/xx/xxxx Test Transaction
> 300.00
> 800.00
>
> Checking 300.00
>
>
> Loan Owed To Me
> 300.00
>
>
>
>
>
>
> Account: Loan Owed To Me
>
>
>
> Date Description
> Tot Increase Tot Decrease
> Balance
>
> xx/xx/xxxx Opening Balance
> 18,000.00
> 18,000.00
>
>
> Loan Owed To Me 18,000.00
>
>
> Equity:Retained Earnings
> 18,000.00
>
>
>
> xx/xx/xxxx Test Transaction
> 300.00
> 18,300.00
>
>
> Loan Owed To Me 300.00
>
>
> Checking
>
>
> Allowance
> 300.00
>
>
>
> xx/xx/xxxx Test Transaction
> 300.00 18,000.00
>
>
> Checking 300.00
>
>
> Loan Owed To Me
> 300.00
>
>
>
> Account: Allowance
>
> Date Description
> Tot Charge Tot Income Balance
>
> xx/xx/xxxx Test Transaction
> 300.00 300.00
>
>
> Loan Owed To Me 300.00
>
>
> Checking
>
>
> Allowance
> 300.00
>
>
>
> I have reversed the sign of the splits in the Test Transaction in Quicken
> and the Loan Owed To Me balance goes to $17,700 after the first entry and
> then back to $18,000 on the second. I did the above without first setting
> up a simple chart of accounts. I then went back and did it with a simple
> chart of accounts and was able to have Allowance recognized as an expense
> when I assigned Allowance as an expense account but the balance of the loan
> still didn't change. I apologize in advance if I've done something
> completely silly here.
>
>
>
>
>
>
>
>
>
>
>
>
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