[GNC] newbie question

[davidcousens49 at gmail.com]

Shevach,

I think you need to step back and understand the way in which double entry book
keeping/accounting works. There is a section labellsed basic in the Tutorial and
Concepts Guide which explains the basic concepts. 
https://www.gnucash.org/docs/v4/C/gnucash-guide/chapter_basics.html.
Wikipedias article on Double entry accounting, 
https://en.wikipedia.org/wiki/Double-entry_bookkeeping#:~:text=Double%2Dentry%20bookkeeping%2C%20also%20known,entry%20to%20a%20different%20account
. is also a good point to start.

A transaction in account is called double entry because each transaction has at
a minimum two components which affect two different accounts.

One way to think of a purchase  is that your are exchanging one asset cash for
another asset the object you have bought. If the object is something you keep
and perhaps make more money out of ( aproperty for example) it remains an asset.
It may depreciate in value (e.g. a car) in which case the loss of value through
depreciation is an expense. Any money you make (by renting the property out is
income. When you make such a purchase you take money out of your bank
account(decrease its balance or credit the account) and you assign its value to
an asset account (e.g for a car ) for the purchase (increase the balance of the
account for that asset or debit the account). 

When your asset depreciates  in value you decrease the balance of or credit  the
asset account by the amount of the depreciation and increase the balance of or
debit an expense account for depreciation to reord your expenditure

Alternatively it may be a purchase (e.g food) where you expect to consume it
within a short period after buying it. In this case your asset is essentially
depreciated immediately on purchase by the full amount of the purchase. In this
case to record the purchase  you again decrease the balance of (or credit) your
bank account and increase the balance of (or debit) your expense account for
food.

Each of these is a single transactions but each has two parts one of which is a
debit entry ( called a split in GnuCash parlance) and the other a credit entry
(also a split in GnuCash language).

Debit and Credit are the formal accounting names and for Asset and Expense
accounts they correspond to Increase  and Decrease of the balance of the
account. However when you are dealing with accounts for Liabilities, Equity and
Income accounts, a Debit entry is a decrease in the account balance and a Credit
entry is an increase in teh account balance, i.e. they have the opposite sense
to what they had for Asset and Expense accounts. 

Each transaction must have at least two entries or splits (it can have more (
e.g. if you have to account for a VAT or GST tax) but the sum of all the debit
entries must equal the sum of all the credit entries for a transaction.

Hope this helps to make how GNuCash works a little more transparent.

David Cousens




On Sun, 2022-02-06 at 22:32 +0200, Shevach Pepper wrote:
> Hello there,
> I have two accounts: income (n.ya.) and cash (my pocket)
> I got payed $500 from n. ya. and the money is  now in "my pocket".
> My problem is when I record in n. ya. charge $500 and in the transfer
> column 'my pocket" it records it as a "spent" right hand column.
> I just can't figure out why it is like this: According to my logic if it
> goes out of income then it should be received by "my pocket"
> Can someone help me to figure out my mistake?
> Thanks a lot
> Shevach
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