[GNC] Beginner Accounting Question Using GnuCash

[Patrick Skelton]

Hi,

I am trying to get my head around double-entry accounting. I think I have
kind-of got it. I have just set up a stripped down set of accounts and
tried a handful of transactions, to see how they affect profit-and-loss and
the balance sheet. It all seems to make sense except that there is one
piece of information that seems to vanish, and I am worried this means I am
doing something wrong.

My transactions beginning with all zero balances are:

(N*ote:* I have added some dates to give context to my later question)

   1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's
   Equity*.
   2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and
   goes into *Stock on Hand*.
   3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is
   assigned to *Income - Sales*.
   4. 4th Dec: I transfer the cost of the paper used to make the notepad
   (£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*.

The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are
£11, which gives total equity of £111. Thus the sheet is balanced.

My question is that no matter what report I run using whatever dates, I
cannot see the £12 I spent on stock. All I ever see is the £1 that I
decided was the cost of the paper taken from stock.

Even if I do reports only for the month of November, I don't see the £12 I
paid for stock because the money came from my bank and went into stock,
which are both Asset accounts.

Is there a better way to do these transactions so that I could ask the
question: how much have I spent on stock this month?

I am a complete newbie so would welcome any help or advice (short of 'get
an accountant', which I would love to but can't afford).

Kind wishes - Patrick