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

[Francis Gerund]

On Tue, Apr 12, 2016 at 12:49 AM, Dean Gibson <gnucash.stuff at mailpen.com>
wrote:

> On 2016-04-11 19:47, DaveC49 wrote:
>
>> Hi Francis,
>>
>> I don't think accounting is irrational ...
>>
>
> I agree.
>
> ... it just has no immutable laws of nature that we can appeal
>> to constrain the practice ...
>>
>
> Only one:  Since accounting tracks where items of value (eg, money,
> assets, liabilities) has come from (credits), and gone to (debits), the sum
> must always be zero.  My accounting knowledge is entirely self-taught, and
> I have found the following model helpful:
>
> I view double-entry accounting as a small one-room house with five
> windows, where items of value come in one window and out the other. Anytime
> something crosses a window threshold, it is recorded.  Since nothing ever
> stays in the one-room house, the balance of debits and credits is always
> equal (eg, sums to zero).  I don't view this so much as a check on the
> accuracy of the system, but rather a way of tracking the purpose of all
> transactions.
>
> Where accounting gets complicated, is in philosophical decisions about
> that purpose:  Eg, is the purchase of an item an expense or an asset?
> That's the hard part to learn;  the math is easy. :)  I tend to be pedantic
> about some of it, because that helps me learn.  Eg, when I record income
> received, I enter the income tax withheld as an asset (that the Federal
> Gov't holds for me), and then adjust that when I compute my actual tax owed
> each year.  Ie, it's not an expense until you know how much it is.  Of
> course, I could just record each withholding as an expense, and then adjust
> it when the actual tax is computed, but I like the view of the pre-paid tax
> balance as a running asset.
>
> ...  I am not so sure that one can think ones
>> way through science. Aristotle tried that and ...
>>
>
> In the same way, I often see accounting newcomers try to shoe-horn GnuCash
> (and occasionally, accounting principles) into their accounting needs.
> That's almost always a disaster that comes back to visit them later in an
> audit (their own, their organization's, or the government's).  Millions of
> people around the world have refined AND AGREED ON an accounting
> "philosophy" that's based on plenty of experience and wisdom, and bucking
> the trend is usually a waste of time.  Accounting (as used by most people)
> is not going to change.
>
>
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Dean Gibson wrote:

----------------------------------------------------------------------------------------------------

"In the same way, I often see accounting newcomers try to shoe-horn GnuCash
(and occasionally, accounting principles) into their accounting needs.
That's almost always a disaster that comes back to visit them later in an
audit (their own, their organization's, or the government's).  Millions of
people around the world have refined AND AGREED ON an accounting
"philosophy" that's based on plenty of experience and wisdom, and bucking
the trend is usually a waste of time.  Accounting (as used by most people)
is not going to change."

----------------------------------------------------------------------------------------------------

Thanks for your input.  I do not disagree with your statement.  I do not
want to stretch out this thread any further,
but I just have to say:

1)  As has been noted, double-entry accounting was devised centuries ago,
to reduce human data errors, in a time when a "computer" was a human that
could do arithmetic computations.

2)  It was a great advance for its time, but so was the horse-drawn plow.
Although both technically still "work", both may be increasingly obsolete.

I do think that, if we can put people on the moon (multiple times) and
return them to Earth safely, we can surely come up with something better
than double-entry accounting, if we put our mind to it.

Something easier.
Something simpler.
Something less complex.
Something useful to all, not just the few.
Something less tedious and cumbersome.
Something more intuitive and accessible to the numerically challenged.
Something that did not require long, agonizing formal or at least informal
study to learn.

WE DESERVE BETTER!

Thank you all for your patience and indulgence.