[GNC] How to automate $ value on the contra account when editing a transaction

[David Cousens]

Davids, John

This is just an aside for terminology clarification and being a trifle
pedantic. 

Although the meaning is clear where you have used contra in this context,
the term contra account is generally used in accounting with a very specific
meaning which is unrelated to the usage here to describe the account which
is debited or credited in the second split.

The general use is to describe a situation where one has an account whereone
needs to preserve the original value and simulataneously record changes in
that value. For example the purchase price of an asset, where that asset is
subject to deprectiation. One normally sets up a structure similar to the
following

Asset:Plant
Asset:Plant:Initial Cost
Asset:Plant:Depreciation

where Asset:Plant is a Placeholder into which the two sub accounts sum.
Asset:Plant:Depreciation is what is usually referred to in accounting as a
contra account because in most cases, but not always, the balance in this
Depreciation account is increased by credits to the account, i.e. it has a
credit balance wheras the Asset:Plant placeholder and Asset:Plant:Initial
Cost accounts have a debit balance and the balance is increased in them by
debits to the account. The overall balance of the Asset:Plant account is
determined by the Initial Cost - Depreciation.  

There are lots of other situations where a contra account is used in this
way in accounting, mainly to preserve information which will be required in
the future for assessing things like capital gains tax or profit or loss on
a particular item.

I have often tried unsucessfully to think of a more appropriate terminology
for the other accounts referred to in balancing a transaction. Elsewhere in
the GnuCash documentation it is sometimes referred to as a transfer account
which is as appropriate a description as I have been able to find in any
accounting text books.

David Cousens



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David Cousens
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