Re: Basic Register - Removing Unwanted Columns

[DaveC49]

Keith,

The use of debit and credit is usually a little bit confusing until you get
a handle on the basic mathematics behind double entry accounting. The actual
meaning of a debit (or credit) depends upon the type of account it is acting
upon. The whole basis of double entry accounting is based on the
relationship between classes of accounts: Assets, Liabilities and Equity
expressed in what is called the Accounting Equation.

Assets = Laibilities + Equity.

To allow easy calculation of profit/loss  (or surplus/deficit for non profit
accounting) over  what is referred to as the Accounting Period ( this can be
weekly, monthly, quarterly, half-yearly or annually depending on how often
you need for internal management or are required to provide information for
external reporting on your profit/loss) two additional temporary Equity
classes are introduced, Income for increases in Equity and Expenses for
decreases in Equity to give the full Accounting Equation:

Assets = Liabilities + Equity + (Income - Expenses). These are
temporaryaccounts in classical accounting because at the end of the
Accounting period their balances (more correctly the difference in their
balances) are normally transferred to an Equity Account (often called
retained Earnings or something similar).

Any transaction affects two or more accounts and the individual components
of a transaction are referred to in Gnucash as splits with each split either
debits or credits one account from one of the above classes of accounts.

A debit split affecting an account on the RHS of this equation, i.e. an
Asset account produces an increase in the balance of that asset account and
correspondingly a credit split to an Asset account will decrease the balance
of an asset account.  

On the other side of the Equation in Liability, Equity and Income accounts a
credit split affecting an account produces an increase in the balance of the
account while a debit split reduces the balance of the account.

Because of the negative sign before Expenses, a debit split to an expense
account increases the balance of that Expense account while a credit split
decreases the balance of that account.

Confusion often arises when we get a statement from a Bank (or supplier or
vendor). They are doing their internal accounting from their perspective
using the convention described above.  Your bank account, an asset to you is
a Libility account to the bank because the money in the account is money
they may have to provide to you at any time. Hence when you deposit money to
your bank account your statement for that account has a credit to it and
when you withdraw money from your bank account your statement will have a
credit, the reverse of how debits and credits affect your asset account from
your perspective.

Using the above you can easily translate between the column headings
Debit/Credit and Increase/Decrease for the various asset classes.

David Cousens



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David Cousens
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Re: Basic Register - Removing Unwanted Columns

[Buddha Buck]

Keith,

The "Transfer" column isn't ever going to go away. It's fundamental to the
concept of double-entry bookkeeping as GnuCash implements it. Double-entry
bookkeeping tracks flows of value, and the transfer column says what the
other side of the flow is.

As for debit and credit, roughly speaking debits are places where money
goes, and credits are places where money comes from. But different people
involved in a transaction see things in different ways.

For instance, if you borrow $100 from a friend, to you you are getting
money from your friend (crediting her "Loan from Sheila") and putting it in
your wallet (debiting your "cash on hand"). She, on the other hand, see it
as taking money from her wallet (crediting her "cash on hand") and giving
it to you (debiting her "Loan to Keith"). It's the same transaction, but
what each side records is different.

The same holds for a bank account. When you deposit your paycheck, you are
getting money from your employer (crediting your "Income from Work"
account) and putting it in the bank (debiting your "Acme Bank Account").
Your bank, on the other hand, is getting money from you (crediting their
"Keith Winans" account) and putting it in their big pile of money (debiting
their "Cash On Hand" account).

When you get a bank statement, they just list off all the transactions in
their "Keith Winans" account, which shows your paycheck as a "credit". From
their point of view it is, but from your point of view, it's a debit.


On Wed, Sep 13, 2017 at 11:22 AM David T. via gnucash-user <
gnucash-user@gnucash.org> wrote:

> With regard to Debit/Credit: common use of these terms is not the same as
> use in formal accounting. Take a look at the Guide beginning at
> https://www.gnucash.org/docs/v2.6/C/gnucash-guide/basics-accounting1.html
>  >
>
> Cheers,
> David
>
> > On Sep 13, 2017, at 7:48 PM, Fross, Michael  wrote:
> >
> > Keith,
> >
> > I unchecked "Use Formal Accounting Labels" in the Preferences Accounts
> > tab.  This confused me as well, but the new "Deposit" "Withdrawal" make a
> > lot more sense to me.
> >
> > I'm interested to hear how this is correct in accounting speak.
> >
> > Michael
> >
> > On Wed, Sep 13, 2017 at 9:37 AM, Keith Winans 
> wrote:
> >
> >> I only want to use the gnucash register to keep track of my deposits and
> >> payments.
> >> I would like to remove 'Num, Transfer, and R' from the list of columns.
> >> Is there any way to do this?
> >>
> >> Also, the Debit and Credit columns seem to me to be backward.
> >> I enter a deposit in the Credit column and it comes out as a negative.
> >> I enter a payment in the Debit column and it comes in as a deposit.
> >> Please clarify this for me please, this is my first time to use a check
> >> register program.
> >> Thanks,
> >> Keith
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Re: Basic Register - Removing Unwanted Columns

[David T. via gnucash-user]

With regard to Debit/Credit: common use of these terms is not the same as use 
in formal accounting. Take a look at the Guide beginning at 
https://www.gnucash.org/docs/v2.6/C/gnucash-guide/basics-accounting1.html 


Cheers,
David

> On Sep 13, 2017, at 7:48 PM, Fross, Michael  wrote:
> 
> Keith,
> 
> I unchecked "Use Formal Accounting Labels" in the Preferences Accounts
> tab.  This confused me as well, but the new "Deposit" "Withdrawal" make a
> lot more sense to me.
> 
> I'm interested to hear how this is correct in accounting speak.
> 
> Michael
> 
> On Wed, Sep 13, 2017 at 9:37 AM, Keith Winans  wrote:
> 
>> I only want to use the gnucash register to keep track of my deposits and
>> payments.
>> I would like to remove 'Num, Transfer, and R' from the list of columns.
>> Is there any way to do this?
>> 
>> Also, the Debit and Credit columns seem to me to be backward.
>> I enter a deposit in the Credit column and it comes out as a negative.
>> I enter a payment in the Debit column and it comes in as a deposit.
>> Please clarify this for me please, this is my first time to use a check
>> register program.
>> Thanks,
>> Keith
>> ___
>> gnucash-user mailing list
>> gnucash-user@gnucash.org
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> -
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
>> 
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Re: Basic Register - Removing Unwanted Columns

[Fross, Michael]

Keith,

I unchecked "Use Formal Accounting Labels" in the Preferences Accounts
tab.  This confused me as well, but the new "Deposit" "Withdrawal" make a
lot more sense to me.

I'm interested to hear how this is correct in accounting speak.

Michael

On Wed, Sep 13, 2017 at 9:37 AM, Keith Winans  wrote:

> I only want to use the gnucash register to keep track of my deposits and
> payments.
> I would like to remove 'Num, Transfer, and R' from the list of columns.
> Is there any way to do this?
>
> Also, the Debit and Credit columns seem to me to be backward.
> I enter a deposit in the Credit column and it comes out as a negative.
> I enter a payment in the Debit column and it comes in as a deposit.
> Please clarify this for me please, this is my first time to use a check
> register program.
> Thanks,
> Keith
> ___
> gnucash-user mailing list
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> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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