[GNC] Should i create "Equity Account" for each currency I had ?

[David Cousens]

Long,

As long as i have been doing accounting, profit or gain  has *never* been
the difference between Assets and Equity.
   
Assets = Liabilities + Equity 

or in the extended form with the temporary accounts broken out separately
from Equity:

Assets =Liabilities + Equity + Income - Expenses.  

You can break that out even further to:

Assets =Liabilities + Equity + Income - Expenses + Gains - Losses

Any transaction which affects an asset, without being purchased via credit,
i.e introducing a Liability ,has the same effect on Equity since such a
transaction credits an Asset account and debits an Equity account and
decreases both the account balances (or vice versa a debit to an asset has a
corresponding split which is a credit to an Equity account and increases the
balances of both accounts). Remember Income and Expense accounts are still
Equity accounts, they are only maintained separately as temporary Equity
accounts for the purposes of calculating profit. Trading accounts are
similarly Equity accounts introduced for the purposes of tracking changes in
capital values. 

It is the value in your trading account which is your gain or loss.

Your assumptions are not correct!

David



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David Cousens
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