Beginners question, confused between real bank accounts and gnucash accounts

Larry Evans cppljevans at suddenlink.net
Mon Mar 28 05:09:00 EDT 2016


BTW, I reformatted the indentation in Ed's post for easier
reading.

On 03/27/2016 11:08 AM, Ed Fields wrote:
> On Thu, Mar 24, 2016 at 2:59 PM, Dale Alspach <alspach at math.okstate.edu>
> wrote:
[snip]
> ​Hello Dale and group
>
> I too am not an accountant.  Your 4 entry solution (reproduced here)
>
> credit Business checking
> debit  Distributions to owner
> credit Income salary
> debit Personal checking
>
> ​appears to be a possible concept for a solution to an
> issue I am grappling with in regards to mutual fund
> distributions​.
>
>   - ​I currently enter the full fund distribution amount
>     into my 'Assets-Investment​s-Mutual Fund-XYZ​' account
>     and link the total amount as a deposit to my checking
>     account.

>   - Concurrently, I manually maintain ​a second account
>     'Income-Investment-Income-XYZ' to record the capital
>     gains portion of the distribution.
>
> This works and is easy for me to comprehend, but I am
> driven to do things the proper way and I sense that
> another solution should would be better.  ​It seems to me
> that gnuCash ​can be used to handle this and that it is me
> that doesn't understand the logic and mechanism needed to
> record these profits into my ​personal account book.
[snip]

Hi Ed,

I'm not an accountant either and I do, essentially, the same
thing as you.  I have investment accounts under assets, and
each such investment account has a corresponding income
account to record the income for that investment.  I also,
under incomes, have taxfree and taxable sub-accounts; hence,
I can keep track of income that taxable and taxfree.

It's a bit of a hassle to maintain 2 accounts (asset and
income), for what should be 1 "entity", my investment
accounts.  For each of these paired asset-income accounts, I
try to make sure they have names which makes it easy to see
the correspondence, and that's one of the hassles.

However, I wondering why gnucash couldn't be redesigned so
that an account, say for an entity named "TaxFreeBondXXX",
be *both* an asset *and* an income account, or, for that
matter, an expense account (to, for example, record
commissions paid to my broker).  It seems that would make
things easier for people like Ed and I.

-regards,
Larry




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