[GNC] Equity Account "problem"

[David Cousens]

The calculation of Equity is automatic and built into double entry accounting
system. This is the purpose to a large extent of the two or more entries
(referred to as splits in GnuCash documentation) associated with a single
transaction. Income and Expenses are Equity accounts that are split off from
equity with the primary purpose of measuring the short term loss or gain over a
specific period and you will notice if you look through the examples in the
GnuCash Help Manual and Tutorial Guide that most transactions involve one split
to an asset or liability account and another to either an Income or Expense
account except where the transaction is regarded as a capital purchase which
will produce income over more than a single accounting period (usually annually
but can be semi annually or monthly). 

It can be circumvented by not following the recommended procedures. First you
need to understand the double entry accounting system basics and then GnuCash's
implementation of it.There are on line resources on double entry if the
introduction in the gude and help manual is too brief for your needs.

David Cousens

 
On Tue, 2023-07-11 at 18:48 -0400, Default User wrote:
> Hi! 
> 
> Is there a way to have Gnucash 4.13 (Debian GNU/Linux 12 Bookworm)
> automatically calculate, and update "Equity" in the main accounts tab,
> to show the "real" value of total Equity, after any action (or at least
> transaction) that would affect "real" equity?  
> 
> Example: 
> Start with the GnuCash "Common Accounts", as in gcashdata_1.gnucash
> from the Tutorial and Concepts Guide, with all accounts set to $0.00.
> 
> Now make a transaction so that Equity:Opening Balances starts with
> $10.00, and Assets:Current Assets:Cash in Wallet starts with $10.00. 
> At this point, Equity = $10.00.  All good so far.
> 
> But now, enter a transaction such as Expenses:Auto:Fuel (increase by
> $5.00), paid by transfer from Assets:Cash in Wallet (decrease by
> $5.00). 
> 
> So now: 
> Assets = $5.00 
> Liabilities = $0.00 
> Equity = $10.00
> 
> So . . .  if Assets - Liabilities = Equity, then 
> $5.00 - $0.00 = $10.00? 
> 
> Thus, Equity does not seem to include the $5.00 Expense transaction. 
> [Note: of course, the Balance Sheet in Reports does correctly show
> Equity as $5.00.]
> 
> I assume that GnuCash has always been this way, from the beginning, and
> is not likely to change now!  
> 
> But is there a viable "workaround"?  I am pretty sure I understand what
> is going on, and maybe why it was done that way (so that the account
> ledger tabs show legitimate transactions" only?) 
> 
> But it does bother my sense of "correctness".
> 
> [Note: I did see somewhere online a link to a web page that may have at
> one time shown the desired solution, but the web page has since been
> 404'd.]
> 
> : (
> 
> 
> 
> 
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