Beginners question, confused between real bank accounts and gnucash accounts

[nicolas severyns]

I chose for one Gnucash file, because I am a freelancer and am a physical
person with a VAT number, according to my national law (Belgium). As I work
from home, plenty of my expenses are private and business at the same time
(heating 30% business, 70% personal and so on). So I have to do transaction
splits all the time to be able to calculate the amount of VAT I have to pay
and the amount of tax deductions I am entitled to. Two Gnucash files would
make that unmanageable, as far is I understood.

I thought the only use of split transactions were of that order: to divide
a sum into smaller sums. I had never thought of the possibility to do a
multiple split with the same sum. I implemented it as you suggested:

Bank Personal                           100                     -
Business:Expenses:Salaries      100                     -
Bank:Company                            -                       100
Personal:Income:Salary          -                       100

and it works. But I don't really understand why it works. It looks more
like 200-200 than like 100-100 to me, but hey, I am a philologist. Gnucash
is challenging to me, but I have decided to come to terms with it. Thanks
for your quick and helpful replies.

Nicolas
ᐧ

Nicolas Severyns
Vertaler-tolk
contact at nicolasseveryns.be
www.nicolasseveryns.be
+32 (0)487 438 897
BTW: 0807.269.434


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On Thu, Mar 24, 2016 at 7:41 PM, Buddha Buck <blaisepascal at gmail.com> wrote:

> A set of books (like a GnuCash file) represents the financial dealings of
> a single entity. Income and Expense accounts represent ways in which value
> comes into and leaves that entity.
>
> In this case, since the entity represented in your books is a combination
> of your personal and business interests, the transfer of money from the
> business account to your personal account does not represent any value
> coming into the entity, so it is not an income or an expense. Your
> transferring of funds direct from one checking account to the other is fine
> in that setting.
>
> However, you probably don't want to think of you and your business as
> being one single financial entity. The fact that you are calling the funds
> transfer a "salary" and thinking that it should somehow be income leads me
> to believe that you think of your personal and business dealings as two
> separate things.
>
> In which case, you should have two sets of books, one GnuCash file for
> your personal dealings, and one GnuCash file for your business dealings,
> and work to keep the two separate (at least, separate until tax time, and
> there are ways to deal with that when it comes).
>
> If you have two sets of books, then the transaction of paying your monthly
> salary becomes two transactions, one in each set of books. In your business
> books, your salary is an expense, and would be recorded as a debit to an
> expense account (and a credit to your business checking account). In your
> personal books, your salary is income, and would be recorded as a credit to
> an income account (and a debit to your personal checking account).
>
> On Thu, Mar 24, 2016 at 2:14 PM Nicolas Severyns <
> nicolasseveryns at gmail.com> wrote:
>
>> In my account setup, I have a private checking account and a business
>> checking account. Monthly, I transfer my salary from my business
>> checking account into my private checking account. (in reality).
>>
>> I enter this transaction into Gnucash, as a transfer between private
>> and business checking accounts, with description 'salary'.
>>
>> But I also have an Income:Salary account. How should I use that account?
>> If
>> Should create a new booking on my private checking account, sending the
>> money I received
>> from my business checking account to this Income:Salary account?
>>
>> If I do that, the checkings account bookings would not reflect my bank
>> statements.
>>
>> I think I am confusing things, but I don't understand what exactly.
>>
>> Any pointers in the right direction would be greatly appreciated.
>>
>> Kind regards,
>>
>> Nicolas Severyns
>>
>>
>>
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