[GNC] Getting My Account To Trial Balance

[Stan Brown]

David T. wrote:

> For those who *do* have such holdings, a balanced transaction will still fail
> the trial balance if the gain or loss isn?t entered. In this instance, there
> will be no entries in IMBALANCE-XXX, since each transaction balances.
> Example: buy 10 shares of X for $100, using cash from your checking account
> (credit/debit of $100). Then sell those shares for $150 (debit/credit of $150).
> Both transaction balance?but where did that extra cash come from? Without
> entering the gain of $50 as income, the Trial balance will fail. 

Is that really what happens?  I can't understand why, if it does. Yes, you end up with an extra $50 in cash, and you also end up with MINUS $50 in the investment: the original debit of $100, and the sale credit of $50, leaving a credit (minus) balance of $50. As far as I can see, the trial balance still balances.

Of course, a negative balance in an investment account should raise a red flag when (if) yo notice it: "Oops, I forgot to enter the gain as a transaction." But I don't see how it should make the trial balance fail.

BTW, instead of a separate transaction, I might record the gain as a split:
Assets:Cash $150 debit
Assets:Investment $100 credit
Income:Gain on investments $50 credit

Is there any disadvantage to doing that, versus two transactions?
Assets:Investment $50 debit
Income:Gain on Investments $50 credit
Assets:Cash $150 debit 
Assets::Investment $150 credit

-- 
Stan Brown
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http://BrownMath.com
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