GnuCash

[Henry Hartley]

On Friday, September 23, 2005 1:59 PM Robert Bell said:
>> 
>> OK, I just don't get gnucash. I want to track a simple cash
>> account for my group of Cub Scouts. I am only used to Quicken so
>> I haven't done any double entry accounting before. My understanding
>> is that I need an income and and an expense account? I really have
>> two sources of income donations and fund raising. I created 3
>> accounts Donations, Fund raising and Expenses. Is this the correct
>> way? So I added an entry to Donations, $100 for example and it
>> tells me the transaction is not balanced. What does that mean,
>> there has to be someplace I can record income without requiring
>> that it come from another account right? I'm sure I'm missing
>> some basic idea here.

First, instead of a single "expenses" account, you would normally have
expense accounts for various types of expenses.  For example, "food",
"supplies", "books" or whatever.  If you don't care, just having
"expenses" is probably fine.

Next, in addition to income and expense accounts, you need "balance
sheet" accounts.  These are grouped into "Assets", "Liabilities" and
"Equity" (or some other name that means the same thing).  Assets are
things of value.  A bank account, a box with cash in it, stocks, bonds,
equipment, etc.  You probably have one - either a petty cash account or
a bank account (or both).  Liabilities are things with value to someone
else.  Typically these are outstanding loans, etc.  You probably don't
have any.

In double entry accounting, each entry has, you guessed it, two entries.
In this case ($100 donation) the other half is "where the money was
put".  In all probability the other half of every transaction will be
your cash account.  

That's about as short a course on accounting as you are ever likely to
see.  It should NOT be relied upon in an audit.  If you have more
questions, send me and email off-list since this isn't really a Fedora
Core or even a Linux topic.

-- 
Henry