Thanks for a sharing fundamental understanding of accounting, that too coming from a person who seems to have actually done booking keeping with pen and paper is a real treat. 😊
It crossed my mind to treat family members as partners but it would have been more complicated than maintaining individual and independent books for every member. Yes, when I raised question about consolidation, i had in my mind that singular entity (I do work for a public limited entity having few subsidiary) and i was kind of trying to mimic the consolidation done between such entities by elimination of inter company transaction. But I will stick with your suggestion to use equity account to post "within family" transaction. That is the cleanest way and future ready way. Thanks again. With my best regards Paras Get Outlook for Android<https://aka.ms/AAb9ysg> ________________________________ From: Michael or Penny Novack <stepbystepf...@comcast.net> Sent: Monday, August 14, 2023 7:36:06 PM To: Paras Desai <desaipa...@outlook.com> Cc: gnucash-user@gnucash.org <gnucash-user@gnucash.org> Subject: Re: Consolidation of family member accounts > > 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. _______________________________________________ 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.
