how to automatically update equity account as each transaction is entered?

[Francis Gerund]

Thanks David and Derek for the replies.

So the short answer is no.  That's sort of what I thought.

I guess it's been too long since I took any accounting classes.

And unfortunately, accounting isn't like science, etc. - you can't just
"think your way through it".  It is internally consistent, but not
necessarily rational; it is just whatever the GAAP say it is.  (That
according to an accounting professor, many years ago).

Thanks anyway!


On Mon, Apr 11, 2016 at 10:33 AM, Derek Atkins <warlord at mit.edu> wrote:

> Hi,
>
> Francis Gerund <ranrund at gmail.com> writes:
>
> > Hello!
> >
> > Yes, I am aware that this issue has come up before, but it really bothers
> > me, so . . .
>
> [snip]
>
> > Now, you find $1.00. So now,
> >
> > Assets:       $1.00
> > Liabilities:  $0.00
> > Equity:       $1.00
> > Income:       $0.00
> > Expenses:     $0.00
> >
> >
> > Right?
>
> That's one approach.
>
> > WRONG - according to GnuCash 2.6.12 !!  It stubbornly shows:
> >
> > Assets:       $1.00
> > Liabilities:  $0.00
> > Equity:       $0.00
> > Income:       $0.00
> > Expenses:     $0.00
>
> This implies you have mis-entered your transaction.  The $1 debit to
> Assets needs to be balanced with a $1 credit from SOMEWHERE.  But you
> clearly didn't do that.  That $1 credit could come from Income, Equity,
> or even a Liability.  You have done none of those, so this *IS* wrong.
>
> > To me, Equity has always been (and always will be) simply the calculated
> > result of
> > "Assets - Liabilities = Equity".
> > That is, "Equity" is just another name for "Net Worth".
> >
> > I don't want to have to look up a balance sheet report just to check the
> > Equity amount.
>
> Sorry, but the "Equity Accounts" only show your equity at a specific
> point in time.  That specific point is either:
>
> a) when you started accounting or
> b) when you close the books
>
> In order to see the Instantaneous Equity you *MUST* look at your
> reports.  This is because Income and Expense accounts are considered
> Temporary Equity accounts, and they hold the changes to equity since the
> last Point-In-Time Equity balance (see above).
>
> > After all, the Equity is (literally) the bottom line, and as they say,
> "the
> > bottom line IS the bottom line".
> > I don't have to do that to get the Asset amount, so why should I have to
> do
> > so to get the Equity amount?
>
> See above.  Income/Expense are also Equity accounts.
>
> > So, is there a way to AUTOMATICALLY get GnuCash to show the Equity amount
> > in the "Accounts" window (or tab),
> > up to date after each transaction is entered?
>
> No.  And there never will be.
>
> > Thank you for any information on this!
>
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
>
> -derek
>
> --
>        Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
>        Member, MIT Student Information Processing Board  (SIPB)
>        URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
>        warlord at MIT.EDU                        PGP key available
>