[GNC] General accounting question about Assets = Liabilities + Equity

[D]

Brandon,

The Guide at section 2.2 says:

"Assets - Liabilities = Equity + (Income - Expenses)"

In your case:

209.01 - 1497.72 = -18818.74 + (22975.27 - 5445.24)

Or:

-1288.71 = -1288.71

Yay!

HTH,
David

On Jan 15, 2020, 13:13, at 13:13, Brandon Captain <caibbor at gmail.com> wrote:
>Hello,
>
>I have a rather general accounting question in regards to the Assets =
>Liabilities + Equity formula, and how it relates to the other GNUCash
>default accounts like Income and expenses. Those accounts are neither
>assets, liabilities, nor equity. So I'm not sure how to factor them in
>-
>unless Income is an asset? Then why isn't it listed as a sub-account of
>Assets?
>
>Take the following accounts for example:
>
>assets (debit) 209.01
>income (credit) 22975.27
>liabilities (credit) 1497.72
>expenses (debit) 5445.24
>equity (credit): -18818.74
>
>(Equity breaks down as 3863.47 in contributions and -22682.21 in draws)
>
>If you add all the debits together, it comes out to 5654.25. Likewise,
>if
>you add all the credits together, you get the same figure of 5654.25
>(which
>as I understand means that it balances).
>
>But assets = liabilities + equity would be ( 209.01 = 1497.72 +
>-18818.74 )
>which just... doesn't work. Not without the other accounts in the
>figure,
>and not without reversing the signs since 1497.72 is actually -1497.72
>in
>reality, and so forth.
>
>I'd appreciate any explanation on this. I've Googled and researched a
>bit
>but there's something I'm still not quite understanding.
>
>Thank you
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