Generally, I consider equity as a holy account, as it is a result of
all we do with all other accounts, but this case could be an exception.
That's a misunderstanding of equity coming from the (very common)
special case of "sole" entities. But say, for example, the entity were a
partnership. Then under equity would be the accounts representing the
shares of the partners. And let's say a partner took a "draw" (or in
reverse, made an increase to their investment). Then "cash" would be one
side of the transaction and THEIR equity share the other side.
And of course, back in the days of pen and ink on paper when we did an
actual "close the books" every so often, just like accounts of type
"income" and "expense" are really temporary accounts of fundamental type
equity*, there would be other temporary accounts under equity. Notably
"profit and loss" because the income and expense accounts would first be
closed into that account and then it closed to equity by the net gain of
loss amount << and that account would be the "profit and loss" report >>
IF you were insisting on keeping just one set of books for the family
(but all having their own banks accounts, income, expenses, some
individual and some shared, all doing their own tax reporting, etc.) it
COULD be done using gnucash. But I would strongly suggest you first had
a good understanding about accounting for partnerships, especially
professional partnerships (where partners have income and expenses
considered just theirs as well as income and expenses shared -- often
law firms like this).
Michael D Novack
* Notice that if accounts of type income and expense were actually in
the tree under equity (as opposed to having their own top levels) then
the fundamental equation assets = liabilities + equity remains true in
its simplest form.
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