[GNC] Tutorial and Concepts

[Stan Brown (using GC 4.14)]

On 2024-11-23 10:08, David Warren wrote:
> I understand this answer, and agree that double-entry accounting does
> not need to be 'daunting', but I don't really agree that the typical
> 'basic' personal finance user is mostly going to make simple entries
> that credit a bank account and debit an expense account simply to record
> purchases.  Here are just a few examples of 'basic' personal finance
> transactions for most users and require more thinking about how to
> record debits and credits correctly:
> 
>  1. Receiving a paycheck (typically will require crediting an income
>     account, and debiting various tax expenses, and possibly debiting
>     401(k) or similar asset accounts, along with one's bank account)
>  2. Transferring money between bank accounts
>  3. Making a mortgage payment (which probably requires crediting a bank
>     account and debiting each of an interest expense account and a
>     mortgage liability account)
>  4. Recording interest or dividend income on investment asset accounts
>  5. Selling an asset for a profit, which has been the source of dozens
>     and dozens of recent emails as people argue about how to record this
>     correctly in DE accounting. ...

To which I would add

   6. Paying for a purchase with a credit card or by taking out a loan.
      Usually the initial purchase involves debiting an expense or asset
      account and crediting a liability account. Then when making a
      payment on the credit card or loan, which is the general case of
      number 3 above, there's debiting that liability and possibly the
      interest expense account, and crediting the checking account (an
      asset).

Stan Brown
Tehachapi, CA, USA
https://BrownMath.com