[GNC] Equity Accounts - Opening Balance or no?

[David Cousens]

Troy
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Assuming your file/book has been started before or concurrently with your
business then yes. You would then record the contributions and draws as normal
transactions as they occur (or backdated appropriately where necessary - for
example I paid a lot of the setup costs for my business out of personal funds as
I had no business accountsor accounting initially, then included them as owner
contributions once I had the accounting setup backdated to when they were made).
 Owner contributions would be recorded as a debit to the bank account  (or the
appropriate asset account if you have used personal funds to purchase a business
asset for example) and a credit to Equity:Owner Contributions. Owner draws will
be the reversal of the debits and credits to the appropriate accounts.
David 





On Wed, 2021-05-12 at 10:24 -0400, Troy Spindler wrote:
> I see. Thank you. So since my business and Gnu Cash file are both new, it
> sounds like I should just use an Equity Account without "Opening balance"
> checked for all owner contributions and owner draws.
> On Tue, May 11, 2021 at 6:52 PM David Cousens <davidcousens at bigpond.com>
> wrote:
> > 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
> > 
> > 
> > 
> > 
> > 
> > 
> > 
> > -----
> > 
> > David Cousens
> > 
> > --
> > 
> > Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
> > 
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-- 
Dr David R Cousens
B.Sc, M.Prof. Acc., Ph.D., G.C.Ed