[GNC] Equity Accounts - Opening Balance or no?

[David Cousens]

Troy,

The Opening Balances in Equity record the net worth of your Assets and
Liabilities at the time you open a new set of books/file. The option to
create them when creating a new file is to accommodate the situation where
you are transferring existing balances from a previous set of books/file.

If there are no existing Assets and Liabilities at the time the book is
opened then you would not create them, i.e  a new business the option should
be checked off.

You can always manually create the transactions at a later stage if you need
to.

To record the value of an existing asset you would debit the corresponding
asset account for the value and credit the value to the Equity:Opening
Balances account. 
 
To record a liability you would credit the corresponding liability account
for the value of the liability and debit  the value to Equity:Opening
Balances account. 

The Opening Balances option on file creation just creates these entries when
opening a new file using the balances entered for the Asset and Liability
accounts. It will not allow you to enter balances for other types of
accounts.

David



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David Cousens
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