No subject

[Kevin Reid]

On Wed, May 31, 2017 at 7:31 PM, Eneko Gotzon <kontakt at enekogotzon.com>
wrote:

> In the Accounting Equation
> <https://www.gnucash.org/docs/v2.6/C/gnucash-guide/basics-accounting1.html
> >
> section of the GnuCash Guide it is stated that: *you could have an increase
> in assets if you have a parallel increase in liabilities*. I do not well
> understand that:
>
>    - Assets are about owned things.
>    - Liabilities are about owed things.
>    - So, *how can an increase in liability increase the assets*?


It is not that one increase causes the other, but that it balances the
other.

For example, you buy an object of enough value to be worth recording as an
asset, but have some sort of loan or payment plan rather than giving the
seller the entire purchase price the same day. Then

     • the value of the object is added to Assets and
     • the money you still owe is added to Liabilities,

and also those are entered together as a single transaction.