[GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?

[Gyle McCollam]

That is an "L" not an "I" in the equation at the end of my email: "A=I (+/-) Eq" to get it to equal.


Thank You,

Gyle McCollam

Gyle McCollam

gmccollam at live.com<mailto:gmccollam at gyleshomes.com>           email

________________________________
From: gnucash-user <gnucash-user-bounces+gylemc=gmail.com at gnucash.org> on behalf of Gyle McCollam <gmccollam at live.com>
Sent: Wednesday, August 31, 2022 3:15 AM
To: W. Neal Lewis <wnlewis at southwind.net>
Cc: gnucash-user at gnucash.org <gnucash-user at gnucash.org>
Subject: Re: [GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?

Neal,
Your welcome.  I see a few others have responded with similar thoughts and explanations.  I'm sorry I forgot to respond to all, so the list did not see my original email, but as I said other replied with similar answers, but in more detail.

Don't worry, I trust you will get there.  I'm sure there are engineering concepts that we accountants would not understand immediately.  The key to this is that at any point in time (Income -  expenses = 🔺Equity).  So if your income and expenses aren't zero (close Books at the end of the year), you have to add this expression to A=I (+/-) Eq to get it to equal.


Thank You,

Gyle McCollam

Gyle McCollam

gmccollam at live.com<mailto:gmccollam at gyleshomes.com>           email

________________________________
From: W. Neal Lewis <wnlewis at southwind.net>
Sent: Tuesday, August 30, 2022 9:24 PM
To: Gyle McCollam <gmccollam at live.com>
Subject: Re: [GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?

Gyle,

Thank you for your reply.

Let me think about it for a while.

It does not yet make sense to my Engineering brain.

Sorry to be so dense, but terms as well as numbers must balance for an equation to be correct.

Best regards,

Neal Lewis



On 8/28/22 6:28 PM, Gyle McCollam wrote:
At the end of the year I (income) - Ex (expenses) is your increase/decrease, depending on whether the number is positve or negative, to equity for the year and at any given point during the year it is your increase/decrease YTD equity figure.  So realistically, when you added +(I-Ex) and it should be minus Ex, you haven't really changed the equation A=L+Eq.


Thank You,

Gyle McCollam

Gyle McCollam

gmccollam at live.com<mailto:gmccollam at gyleshomes.com>           email

________________________________
From: gnucash-user <gnucash-user-bounces+gylemc=gmail.com at gnucash.org><mailto:gnucash-user-bounces+gylemc=gmail.com at gnucash.org> on behalf of W. Neal Lewis <wnlewis at southwind.net><mailto:wnlewis at southwind.net>
Sent: Sunday, August 28, 2022 6:38 PM
To: gnucash-user at gnucash.org<mailto:gnucash-user at gnucash.org> <gnucash-user at gnucash.org><mailto:gnucash-user at gnucash.org>
Subject: [GNC] Can someone tell me how A-L=Eq+(I-Ex) is correct?

I will agree that by mathematical logic, Assets-(Liabilities)=Equity. ∴
Assets+(Liabilites)-(Liabilities)=Equity+Liability, or stated more
simply, A=Eq+L. I have added Liability to both sides ∴ both sides remain
equal.

However, although (A+L)=Eq, (A+L)≠Eq+(I+Ex). I have added a term to the
right side that is most decidedly not on the left ∴ they cannot be equal.

∴ A and L must be terms that include other factors.

Not good at accounting, I will ask what those other factors are.

I want to use GnuCash but I am having trouble getting my mind to accept
an equation that is not correct unless terms are redefined.

Please help me with my (obviously) incorrect understandings.

Thank you,

Neal Lewis
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