[GNC] help to set up equity sub-accounts opening balances

[Adrien Monteleone]

Not sure all of that was in chronological order, so I'm still a little 
fuzzy, but maybe this will help you:

Income should be its own account (of type 'Income') in GnuCash. You can 
of course have sub accounts here to track various sources.

When you earn (or receive if on a cash-basis) then the transaction 
should look like this:

Dr. Assets
Cr. Income

What asset account you use depends on the form of what you received. If 
direct deposit, then Checking would be fine. If a paper check, one 
practice is to temporarily use an 'Undeposited Funds' account until the 
deposit (which may not be the entirety of the check) is made. If cash, 
well, then 'Cash' is the account used.

When you incur (or pay on a cash-basis) an expense, the transaction 
should look like:

Dr. Expenses
Cr. Assets

Of course, the expense account(s) used depend on the nature of the 
actual expense. The asset account(s) depend on the actual source of the 
funds. If you buy with a credit card then the transaction would look 
like so:

Dr. Expenses
Cr. Liabilities (with a sub-account for the particular card)

What you seem to be describing is a savings plan and/or a segregation of 
funds for some purpose other than regular expenses. While you can employ 
equity accounts here, using an asset account is probably more in-line 
with the real world events. (the money is still yours as long as it 
doesn't represent a liability)

I wasn't quite clear if this is 'virtual' earmarking of funds or 
real-world separate accounts. (like a savings account, or as with some 
checking accounts, a special designation amount)

If a real-world account at a financial institution, and you are moving 
funds from one account to another, then reflect that move with a 
transaction. Both accounts will be asset accounts.

If this is just for your informational purposes to see how much you've 
set aside, (but the money doesn't *yet* leave the physical checking 
account) then create a sub-account of checking and do a transfer between 
the parent and sub.

This way, the total of the parent account can show the actual real-world 
balance (if desired) and you can see how much is in various earmarked 
sub-accounts.

Now, when you spend those earmarked funds for real, say by donating to a 
charity, then that would be a regular expense transaction as above. You 
have two options here:

1. First, transfer the funds back to the parent, then enter the 
gift/charity expense transaction from the parent. (how it happened in 
the real world)

2. Make the expense transaction as coming from the sub-account.

I would prefer #1 for my future self, because I find modeling the 
real-world is easier to investigate down the road if I find 
discrepancies. But #2 is one less transaction to enter. Either method 
would retain tracking of the balance remaining (if any) that is still 
earmarked.

Now, if you also need to track how much you've *pledged* to donate, that 
is another layer of complexity. Doable, but yes, a bit of extra work.

Finally, since you are eventually spending the earmarked funds, your 
income and expenses will balance to zero. (with some temporal 
discrepancies depending on when you spend those funds vs. when you 
receive them.)



Regards,
Adrien

On 8/5/20 4:14 PM, Marilyn Graves Kimple via gnucash-user wrote:
>   Thanks-- but my problem is that I do not treat items from these equity accounts as expenses at all. In my former program it was called a "fund" account and I could move funds in and out of the equity accounts without affecting my monthly expenses. It was like an assets account but of course it just represented a designated portion of my assets. Since I cannot assign an opening balance to part of my equity account I am not sure this is something I can now do.
> For example, I write a check for a donation, credit my checking account and directly debit my tithe (equity) account. It does not show up as a monthly expense, although I transfer funds each month to the tithe (equity) fund by debiting what I am (possibly incorrectly) calling my accruals (expense) account. I divide up any profit/loss at the end of the month directly to my equity sub-accounts as credits, so my income always zeros out my expenses at the end of the month.
> I would sure like to figure out a way to do that in GnuCash. If I just treated my tithe, etc. accounts as expenses I do not see how I could keep a running balance.  Maybe I will just have to do something different.