Basic GnuCash bookkeeping question

bassdrinker

Good morning all, forgive the newbie post.

I am trying to use GnuCash as a basic home accounting system as I prefer to utilise open source software and also avoid being tied to a particular platform. I can relate to the double entry system in that every expenditure has to balance to a credit in a different account. Hopefully this example shows I am on the right lines.

£25.00 Payment debit card payment to filling station.

Current Account Debit 25.00
Car Account Credit 25.00
Balance zero

However, how do I pay in my salary?

Current Account Credit £2000.00
Balance £2000 (Not zero)

Where do I debit the £2000 to balance to zero? This seems so obvious that I can't understand why Google does not help (a typical search gives salary of a qualified bookkeeper so my search terms may be somewhat lacking).

Regards

Bd

Anthorn

Have a look on YouTube for Gnucash. That's how I learned to use it. If you have started off correctly salary goes into checking / current account from which payments go to other accounts and it can be set up to credit and debit according to a schedule.

i.e. Gnucash Tutorial: Basics
https://www.youtube.com/watch?v=_K_IIrMUnNA

LardyCake

bassdrinker wrote: »

Good morning all, forgive the newbie post.

I am trying to use GnuCash as a basic home accounting system as I prefer to utilise open source software and also avoid being tied to a particular platform. I can relate to the double entry system in that every expenditure has to balance to a credit in a different account. Hopefully this example shows I am on the right lines.

£25.00 Payment debit card payment to filling station.

Current Account Debit 25.00
Car Account Credit 25.00
Balance zero

However, how do I pay in my salary?

Current Account Credit £2000.00
Balance £2000 (Not zero)

Where do I debit the £2000 to balance to zero? ...

I suspect you may have missed the concept of "Account Types".
Money comes in via "expense" type accounts.
Money goes out via "income" type accounts.

You should set up top level accounts should belong to these account types:
Assets
Equity
Expenses
Income
Liabilities

Then under these a structure something like this:
Assets
---Capital Assets

---

Cars

---

Property
---Current Assets

---

Current Account 01

---

Savings Account 01
---Investments

---

Share dealing platform 01
Equity
---Opening Balances
---Year End
Expenses
---Food
---Petrol
Income
---Salary
---Interest
---Dividends
Liabilities
---Credit Card 01

Then in your examples:

1) Create a transaction (with appropriate description - eg: debit card petrol) in account "Assets-->Current Assets-->Current Account 01" with transfer to "Expenses-->Petrol" with £25 in the "withdrawal" column.
If you then look at the account "Expenses-->Petrol"
you will see £25 has appeared in the "expense" column

2) Create a transaction (with appropriate description - eg: salary employers name) in account "Income-->Salary" in account "Income-->Salary" with transfer to "Assets-->Current Assets-->Current Account 01" with £2,000 in the "income" column.
If you then look at the account "Assets-->Current Assets-->Current Account 01" you will see £2,000 has appeared in the "deposit" column

Obviously the detailed structure will be personal to you (mine goes into great detail!). Don't worry it is easy to move accounts within the structure.

It is also worth setting the "tax related" marker on taxable income accounts as you can generate a "tax report" at the end of the tax year to help fill in your tax return.

Also at the end of the tax year I zeroise all the "income" and "expenses" accounts with a "year end 20xx" transaction to "Equity-->Year End"


It is a long time since I first set up my basic account structure but I am sure I found some guidance via a link on the GnuCash website (sorry can remember more)

edit 1: to correct example a/c formatting

LardyCake

Here is the link to GnuCash Tutorial and Concepts Guide:

http://www.gnucash.org/docs/v2.6/C/gnucash-guide/