Unreconcile Bank Transactions

[Mike or Penny Novack]

On 11/14/2016 12:37 PM, EasyGoingPat wrote:
> Thank you for that information, David.  I will check out that link, as I'd
> like to know as much as possible about how accounting in general and GnuCash
> in particular work.
>
> Actually, I think I may be able to leave my accounts the way they are.  The
> mistake I have made (repeatedly) is to list cash withdrawn from the business
> against the Owner's Equity account.  This means that my Profit & Loss
> statement for the given period shows no drawings.  I have just read in an
> accounting book that normal practise is to list cash withdrawn as an
> Expense-Drawings and then at the end of the financial period to transfer
> this to a debit against Owner's Equity.
>
> Does this sound right?  If it is then I can simply leave things the way they
> are and accept that there is an error in the Profit and Loss for the period.
Not EXACTLY an error. Accounts of type "income" and "expense" are 
actually temporary accounts of fundamental type "equity". You will find 
other accounting books that for sole proprietorships and partnerships 
will do the transaction against a "drawing" account under equity. Money 
the owners put into a business isn't income of the business and money 
taken out is a reduction of investment, not an expense.  When I learned 
bookkeeping, the way you did it was the norm.

Michael D Novack