[GNC] gnucash-user Digest,new question

[Eric Hammond]

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I have completely replaced my defunct Quicken with GnuCash, and now trying to get the details fine-tuned:
I am using Job cost accounting for my business, 
My main resource is from the OpenStax book - "Principles of Accounting, Volume 2: Managerial Accounting" page224 - 226
And a lot of internet searches...

Entering my labor, parts and supplies would look like this:
Assets:Jobs:xxxxxx:WIP         500.00
________:Direct Labor                           120.00
Assets: Stock                                               20.00
________:Direct Labor                            360.00

1. If I use "Expenses:Direct Labor" as the credit account then those account balances are all negative (which, at least, looks weird in an expense journal)
2. If i use "Income:Direct Labor" the balances are positive.

With settings #2 all the tax reports look correct. I didn't check during #1 settings. 
Which one is correct? Does GnuCash care about the negative balance? Is there a better way log it?

Thank you for a great accounting tool, and all your help.

Eric Hammond