[GNC] Beginner Accounting Question Using GnuCash

[Michael or Penny Novack]

You are doing things correctly.

Your question " 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?" 
isn't about what accounts to have or how to enter the transactions (of 
your little example -- and BTW, that's a good way to learn with a 
simplified "test" set of books).

It's about what reports do I want to run to show what I want to show. 
You have run the "Income Statement" and "Balance Sheet" but neither of 
those would show what you want to see. Gnucash has lots of reports and 
they show different things.

So your question should be "what report do I want to run in order to see 
just the flow into and out of a specific account?" << what report would 
show me JUST "stock on hand" and its transactions and only that >> We 
could simply tell you that but at the learning stage you are at it might 
be better if you just ran some of the other reports to see what they do, 
which report does what. That's because you are going to have a lot more 
questions of the sort "what report do I run in order to see...?

Michael D Novack





On 12/17/2021 6:19 AM, Patrick Skelton wrote:
> 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
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There is no possibility of social justice on a dead planet except the equality of the grave.