Assets are things that you own, including balances at a bank account. Liabilities are things that you owe, including mortgages and credit cards. Equity is the difference between the two, including income and expense. Debit means the left column and credit means the right column. Assets increase with debits and Liabilities and Equity increase with credit.
For every transaction the sums of the two columns have to be the same. I'll leave it as an exercise for you to work out examples of income->asset (getting paid), asset->expense (buying groceries with your debit card), liability->expense (buying something from Amazon with your credit card), and asset->liability (paying your credit card bill from your bank account). One last point: Your banks account balance is an asset to you and a liability to the bank, which is why your bank statement shows the balance increasing with credit: The statement is from the bank's point of view. There's a Free alternative to GnuCash for users who don't want to deal with the complexity and rigor of real accounting: KMyMoney. Regards, John Ralls > On Nov 7, 2020, at 7:32 PM, w...@theprescotts.com wrote: > > Then I really don't understand. If I eat in a restaurant, it will depend on > how I pay for the meal. If I use cash or a credit card, checking won't be > involved at all. > If I use a debit card, it will be a 'Withdrawal' from the checking account > and a 'Tot expense' to the Eating out account. But I have checking set up as > a 'Bank' Account, not as an 'Asset' account. Maybe that is the difference. > > Will > > > > On 2020 Nov 7, at 11-07 18:42:21, Derek Atkins <de...@ihtfp.com> wrote: > > Nope. > Credit checking and debit expense. > > -derek > Sent using my mobile device. Please excuse any typos. > > On November 7, 2020 7:27:04 PM "w...@theprescotts.com" > <w...@theprescotts.com> wrote: > >> IANA (I am no accountant), but don't you have the credit/debit reversed on >> the example Assets:Checking and Expenses:Eating out. >> >> I would think it would be debit to checking (withdrawal) and a credit to >> Eating out. Maybe I don't know what Cr and Dr stand for. >> >> Will >> >> On 2020 Nov 7, at 11-07 15:49:52, Gal <galb...@gmail.com> wrote: >> >> The most requested feature in gnucash is to have transaction classification, >> also known as tags / dimensions / categories / classes >> https://gnucash.uservoice.com/forums/101223-feature-request/suggestions/1543027-transaction-classifications >> >> Say I spend 100€ at a restaurant during a vacation in Italy. >> The obvious transaction is a 100€ credit to checking account and 100€ debit >> to Expenses:Eating out >> But I would also like to be able to track the vacation expenses, so I have >> to classify all transactions took place during the vacation, for example >> with a #italy2020 tag. >> >> Summarizing all discussions I've read, there are two common workarounds, or >> ways to manually implement classification in gnucash: >> >> 1. By adding the tag #italy2020 to the description, note or memo field of >> the transaction. >> The transaction report can then filter transactions by the tag string. >> >> 2. By creating an additional account, called italy2020, and change the >> transaction splits in the following way: >> Cr. Assets:Checking 100€ >> Dr. Tags:italy2020 100€ >> -- >> Cr. Tags:italy2020 100€ >> Dr. Expenses:Eating out 100€ >> >> >> Those of you who implement such taggings, can you share your method, and why >> you prefer your method over the other? >> >> >> >> -- >> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html >> _______________________________________________ >> gnucash-user mailing list >> gnucash-user@gnucash.org >> To update your subscription preferences or to unsubscribe: >> https://lists.gnucash.org/mailman/listinfo/gnucash-user >> If you are using Nabble or Gmane, please see >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >> ----- >> Please remember to CC this list on all your replies. >> You can do this by using Reply-To-List or Reply-All. >> >> _______________________________________________ >> gnucash-user mailing list >> gnucash-user@gnucash.org >> To update your subscription preferences or to unsubscribe: >> https://lists.gnucash.org/mailman/listinfo/gnucash-user >> If you are using Nabble or Gmane, please see >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >> ----- >> Please remember to CC this list on all your replies. >> You can do this by using Reply-To-List or Reply-All. > > > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
