If you take out a loan (a liability), the amount you borrow is now in your
hands as an asset.
So if you borrow €1000, you have increased your liabilities by €1000, and the
amount you borrowed is perhaps in a bank account. The bank account is the asset
and the loan is the liability.
The entry for this transaction would be:
Debit Assets:Checking €1000
Credit Liabilities:Loans €1000
The accounting equation in its most basic form is:
Assets = Liabilities + Equity
What you’ve just done is this:
Assets + €1000 = (Liabilities + €1000) + Equity
Since you added €1000 to both sides of the equation, it is still in balance.
This is a very simplified explanation however. I would suggest finding a basic
accounting text, in print or online, to get a good grasp of the accounting
equation and how to record basic transactions. The GnuCash Guide will help you
enter transactions in the software, but it cannot by itself teach you
accounting.
Regards,
Adrien
> On May 31, 2017, at 9:31 PM, Eneko Gotzon <kont...@enekogotzon.com> wrote:
>
> Hi all bytes & money masters :)
>
> In the Accounting Equation
> <https://www.gnucash.org/docs/v2.6/C/gnucash-guide/basics-accounting1.html>
> section of the GnuCash Guide it is stated that: *you could have an increase
> in assets if you have a parallel increase in liabilities*. I do not well
> understand that:
>
> - Assets are about owned things.
> - Liabilities are about owed things.
> - So, *how can an increase in liability increase the assets*?
>
> Sorry about this kind of questions; I'm an absolute beginner in both
> accounting & GnuCash; in addition, I'm also a self teacher in English. I
> can understand your silence.
>
> Thank you.
>
> --
> *Eneko Gotzon Ares*
> *Jakintza, Sorkuntza, Etika, Estetika, Bizitza*
> *Donostia, EH-NA*
> *Tf *
> *(+34) 943 273 431 — (+34) 639 626 858*
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> edonolako ardurei.*
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