Owner's Draw setup under Equity group

[Adrien Monteleone]

Brian, as for properties to the signs of accounts you want to look under Preferences > Accounts > Reverse Balance Accounts (exact menu location will vary by operating system)

You can experiment with the three settings that update live as you change them in the Account Tree tab to your liking.

I have mine set for ‘Credit Accounts’ which will normally result in positive balances for everything save for contra credit(and contra asset) accounts, of which Equity is one because it normally has a credit balance. With this setting, an Owner’s Draw account, having a debit balance will show as a negative. Mind you, this doesn’t mean a negative debit. It means negative equity value.

You can switch this setting to either Income & Expense, or None as desired to give a positive balance to the Owner’s Draw account, but you might not like the resulting reversals for the other affected accounts. While it would be nice to work with positive numbers in all cases, contra accounts are always going to present a problem. I rarely use them, so the ‘Credit Accounts’ setting for Reversed Balance works for me. Such contra balances SHOULD show up with a reversed sign because that tells you at a glance either all is right (or not) with the balance of that account if it is the sign expected.

What makes the Owner’s Draw account a ‘contra’ account is not a special setting, but rather that it will normally have a balance which is contrary to the normal balance of that account type. Equity accounts are normally Credit balances. You would not want to see positive signs for balances for both Owner’s Capital and Owner’s Draw in normal circumstances.

-Adrien


> On Mar 12, 2017, at 4:34 PM, Brian Hagen <bdhagen at fastmail.com> wrote:
> 
> Hello, Adrien:
> 
>     Thank you for the response:
> =======
>  Brian, Indeed Owner?s Draw is generally a temporary account, when dealing with paper. ...
> Can you provide example transactions or balances which illustrate why you don?t think things
> are working as intended? 
> ===========
>     What I have done so far is to create an account under Parent "Equity",
> and titled it Owner's Draw. When I did a sample $50 transfer from
> Business Savings to this account, the results were mixed:
> 
> 1) Savings was decreased (good)
> 2) Equity itself was decreased (good)
> 3) Owner's Draw showed up as negative in red (good or bad?)
> 
>     Bookkeeping texts I have read state that Owner's Draw should
> be of a type "contra equity" which I take to be a reversed type.
> In other words, deposits to it should be positive (?) even 
> though it is a withdrawal from Assets. Since I am accumulating
> funds to be spent for personal use (hence no longer 
> Business-available), should this still be listed in GNUCASH as red?
> 
>     Ideally, it seems to me that I should be able to
> access the Draw account's "Properties" (or similar
> attribute), and declare it to "contra". So far,
> no text on GNUCASH that I have seen describes
> if/how this could be done.
> 
>     That is why I am uncertain if I am doing this
> right. It seems that the Draw account should be listed
> in black since it is money now available for spending. If I 
> cannot figure out what else to do, I suppose that I could just 
> keep transferring from Assets to Draw for the next fiscal year,
> and watch the red amount grow as I spend for personal use.
> 
>     One good thing is that the GNUCASH
> Imbalance item is still 0.00. At least I am not
> dealing with "how to correct that". :-)
> 
> Brian
> 
> 
>