[GNC] Assets vs. expenses vs. income entry

[Stan Brown]

On 2021-02-21 15:22, gnu Gord wrote:
> I'm unsure of the best way to record the adding/modifying of an asset.
> Should the transaction go directly to an asset account or an expense
> account then create an asset? Let me explain.

I started writing out a detailed reply, but David Cousens said it all
well, and rather than just pile on I will say that I agree with what he
said.

I'll add one thing: if you find yourself asking "should I record a
transaction to equity", the answer is almost certainly No. Changes in
your net worth arise from income and expenses, so they should be
recorded in the appropriate Income or Expense accounts.

Buying an asset doesn't change your net worth, and therefore it is not
income or expense; the same is true of paying a bill or paying principal
on a loan. (The interest portion of a loan payment is an expense; the
principal portion is just a debit to a liability account.)

-- 
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
https://OakRoadSystems.com