How and when to use ....

[Aaron Laws]

On Fri, Oct 21, 2016 at 12:06 PM, gargameow <lipchg at gmail.com> wrote:

> Hi all,
>
> Just another separate list of questions.
>
> 1) In real life, I have 10k in my bank account.
> So to use GNUCash, I create an entry in Equity > Open Balances (Increase
> column) with Tranfers to Asset > Bank Savings account. Is that correct?
> When
> do I use the decrease column in Open Balances?
>

This is correct. The transaction you describe can also be described as
Opening Balance   CR  $10k
Bank Savings         DR  $10k
Then, your question becomes more recognizable: "When do I debit Opening
Balance?" This would be necessary to set the opening balance of liability
accounts.


> 2) When I borrow money from friends to buy a car, I have to create an entry
> under Liabilities > Loans with amount put under "Increase" column, is that
> correct?
>

Yes. The liability is increasing.


> For 'Transfer' column, what do I link it to?
> 1) Assets > checking account? or
> 2) Assets > bank saving accounts? or
> 3) Assets > cash on hands? or
> 4) Directly to Expenses > Car?
>
> Depends on where your money went. If your friend paid for the car himself,
you *might* use 4). Perhaps the friend gave you a cheque which you
deposited, then you wrote a cheque for the car? 1) is the answer in this
case. If you deposited to Savings, then 2. If the friend gave you cash,
then 3.

Enjoy using gnucash!