On 2023-01-03 13:15, Jamie Tolbert wrote: > Starting a new business. For the next month or so, what few bills I have > will be paid by me, until I get my business checking set up. Its been > years since I studied double entry accounting, but I thought if I paid a > bill for lets say 100.00, I would credit my owner account for 100.00 and > debit whatever expense account it is. I cant find how to credit my owner > account, or opening balance.
Welcome to GnuCash! I strongly recommend a quick review of double-entry bookkeeping, for instance in GC's Tutorial and Concepts manual. Believe me, it'll save you a world of pain. (GC just automates the big leatherbound ledgers of traditional bookkeeping. The "rules" of using GC are just the same as the rules of bookkeeping.) In your example, you would not credit Equity ("my owner account") when you pay a bill. Crediting an equity account increases its balance, and you don't own anything more than you did before you paid the bill. Your equity in the business is the net of assets minus liabilities, but it's quite rare that you would make any transaction in an equity account directly. (The net of current-period income minus expenses is a special kind of equity, often called Retained Earnings.) Liabilities, Equity, Income -- credits increase, debits decrease Assets, Expenses -- credits decrease, debits increase The bill is a liability, specifically in Accounts Payable, and credits also increase liability balances. So you would _debit_ Accounts Payable to reduce the amount you owe. What are you paying the bill with? Presumably cash, or maybe a check or bank transfer, possibly a credit card. You would _credit_ the account for whatever method you used to pay the bill. Your cash and bank accounts are assets, so a credit reduces their balance. Your credit cards are liabilities, just like Accounts Payable, so a credit _increases_ their balance.(*) Either way it makes sense: you give up some cash or money-in-bank (credit an asset) to wipe out a bill (debit a liability), _or_ you_ add to your credit-card balance (credit a liability) to wipe out a bill (debit a different liability). In every transaction, total credits must equal total debits. (*)People often get confused about credits and debits when dealing with a bank account or credit card, a credit on the bank's books is a debit on yours, and vice versa. When you write a check, you are reducing the amount in your bank account (crediting an asset). But to the bank, your checking account is a liability, so when your check is cashed the bank reduces the amount in your checking account (debiting a liability). Similarly, when you return a purchase for a "credit", it's a credit on the bank's books (reducing an asset, Accounts Receivable) but it's really a debit to you (reducing your liability, Accounts Payable). Stan Brown Tehachapi, CA, USA https://BrownMath.com _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: 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.