income accounts

[Buddha Buck]

It seems exactly right to me.

Income and Expense accounts traditionally represented the accumulated
incomes and expenses over a given reporting period. Between reporting
periods, the accounts would typically be "closed" by transferring their
balances to Equity accounts (incomes increase equity, expenses decrease
equity). That way, when it was time to create a profit and loss statement
(or income statement), the accountant could just look at the final balances
in the income and expense accounts to get the totals for the accounting
period.

GnuCash is able to generate an income statement between any two dates, so
there is no requirement to formally "close the books" at the end of a an
accounting period any more. Just keep in mind that the account balances for
those account types are always going to go up, and represent the total
accumulations since the books were last closed.

As such, Income and Expense accounts are viewed as "temporary" accounts
pulled out of Equity. On a balance sheet only Assets, Liabilities and
Equity is listed (with Income and Expenses summarized as the one line
"Retained Earnings).

On Wed, Sep 23, 2015 at 3:45 PM <bugreport19621012 at fastmail.fm> wrote:

> I am new to double-entry bookkeeping.
>
> I have several accounts with LittleCreditUnion. (Names are changed.)
>
> In GnuCash, I have named these accounts:
>
> Assets:LittleCreditUnion:LittleCreditUnionCHK (checking)
>
> Assets:LittleCreditUnion:LittleCreditUnionSAV (savings)
>
> Assets:LittleCreditUnion:LittleCreditUnionCERTIFICATE (certificate of
> deposit)
>
> When my LittleCreditUnion statement tells me that I received
>
> $5.55 dividend associated with
> Assets:LittleCreditUnion:LittleCreditUnionSAV
>
> and
>
> $25.01 dividend associated with
> Assets:LittleCreditUnion:LittleCreditUnionCERTIFICATE
>
> and I want to record them in my GnuCash register, to what account should I
> best attribute the income?
>
> For the time being, I have created an account called
>
> Income:LittleCreditUnion and I attribute the dividends to that.
>
> Then, after entering the amounts into GnuCash, Income:LittleCreditUnion
> shows a balance of 5.55 + 25.01 = 30.56.
>
> Then this Income:LittleCreditUnion account keeps getting bigger and
> bigger; it seems merely to represent the sum of all dividends paid to me by
> LittleCreditUnion.
>
> Is the proper way to think about it?
>
> I love GnuCash and am eager to learn the proper way to think about
> bookkeeping.
>
> Thank you for any wisdom on this.
>
> Jacob Wegelin
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