[GNC] Interest Income

[David Cousens]

Abe

You have the debit and credit entries for a bank account (asset account) back to
front.
  
When you deposit money into your bank account you debit the bank account and
credit an appropriate income account  (or another asset account if it is a
transfer of money between asset accounts).

When you purchase something your bank account is credited and the appropraite
expense account is debited

The confusion arises because your bank's statement is prepared from their
perspective. What is an asset in your hands (your bank account) is a liability
to them in their hands so you will find that debits and credits are reversed
between your banks statement and in your own accounts. 

It is the reverse for a credit card account which is an asset for the bank and a
liability for you.

How debits and credits affect different types of accounts takes a bit of getting
your head around initially.
 
The short set of rules is:

Asset and Expense type accounts - debits increase the balance and credits
decrease the balance;

Equity, Income and Liability type accounts Credits increase the balance and
debits decrease the balance.

Hope this helps make it a bit easier to follow.

David Cousens

On Mon, 2023-02-20 at 15:16 -0500, Abe Sternberg wrote:
> I understand that part.  If I buy clothes, I debit (-) the checking 
> account and credit the clothes (+) account.  It is when things are not 
> obvious or go to something like an equity account that I am totally at sea.
> 
> Thanks again,
> 
> Abe
> 
> On 2/20/2023 15:04, Gyle McCollam wrote:
> > Just think of double entry as when you are spending, the money comes 
> > from some account and is spent on something (expense account).  When 
> > you are receiving money, it comes from somewhere Income, donation, 
> > etc. and gets put into some asset account, savings, building fund, 
> > cash on hand.  There are two items for every expanse or receipt.
> > 
> > Thank You,
> > 
> > *Gyle McCollam*
> > 
> > Gyle McCollam
> > 
> > gmccollam at live.com <mailto:gmccollam at gyleshomes.com>email
> > 
> > ------------------------------------------------------------------------
> > *From:* Abe Sternberg <abe.h.sternberg at gmail.com>
> > *Sent:* Monday, February 20, 2023 2:53 PM
> > *To:* Gyle McCollam <gmccollam at live.com>; gnucash-user at gnucash.org 
> > <gnucash-user at gnucash.org>
> > *Subject:* Re: [GNC] Interest Income
> > That sounds too simple - I'll try it.  I really get confused with this 
> > double-entry business, but these records are for a non-profit and I 
> > have to be sure they are kept correctly.
> > 
> > Regards,
> > Abe
> > 
> > On 2/20/2023 14:31, Gyle McCollam wrote:
> > > Just a thought, if you haven't set up your savings account before and 
> > > you are setting up the initial balance as the transaction you are 
> > > referring to you would debit the savings account and credit an equity 
> > > account.  Most likely a beginning balances account.
> > > 
> > > 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 Abe Sternberg <abe.h.sternberg at gmail.com> 
> > > <mailto:abe.h.sternberg at gmail.com>
> > > *Sent:* Monday, February 20, 2023 12:46 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] Interest Income
> > > I have just started using Gnucash for my savings account, not much money
> > > involved here, and wanted to enter my first transaction.  Not being good
> > > at double-entry bookkeeping, I have no idea what are the two off-setting
> > > accounts.  I imagine that I use income, but what is the other account?
> > > 
> > > Thanks for your help to a dumb guy.
> > > 
> > > Abe
> > > _______________________________________________
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