From 677f475292b57dc07883420822b696a06d8596c4 Mon Sep 17 00:00:00 2001 From: Simon Michael Date: Thu, 11 Apr 2024 09:49:05 -1000 Subject: [PATCH] faq: edits --- src/FAQ.md | 16 +++++++--------- 1 file changed, 7 insertions(+), 9 deletions(-) diff --git a/src/FAQ.md b/src/FAQ.md index 8929dda..533b3a9 100644 --- a/src/FAQ.md +++ b/src/FAQ.md @@ -65,7 +65,7 @@ In english, they are **Assets** (things you own), **Liabilities** (things you ow In practice, two more top level accounts are used, making five. In english: **Assets**, **Liabilities**, **Equity**, **Revenues** (or **Income**), **Expenses**. -Sometimes abbreviated to single letters; hledger uses A, L, E, R, X. +Sometimes abbreviated to single letters; hledger uses **A**, **L**, **E**, **R**, **X**. Revenues and Expenses are essentially inflows and outflows during some period; technically they are changes in Equity, reported separately for clarity. @@ -78,13 +78,13 @@ More: [hledger: Accounting Basics](https://hledger.org/accounting.html#debits-an It is a simple formula that always holds true when bookkeeping is correct. You'll see it written in different ways, eg: -**Equity = Assets - Liabilities** +Equity = Assets - Liabilities -**Assets + Liabilities + Equity = 0** (using PTA's sign convention) +Assets + Liabilities + Equity = 0 (using PTA's sign convention) -**Equity = Assets - Liabilities** +Equity = Assets - Liabilities -**Assets = Liabilities + Equity + Revenue − Expenses** +Assets = Liabilities + Equity + Revenue − Expenses [Wikipedia](https://en.wikipedia.org/wiki/Accounting_equation), [Investopedia](https://www.investopedia.com/terms/a/accounting-equation.asp) @@ -125,11 +125,9 @@ Many plain text accounting tools use **signed numbers** in place of the traditio Of course the credits and debits are still there; in this system, whenever you see a negative amount being posted in an account, it is a credit, and when you see a positive amount posted, it is a debit. Newcomers to accounting find this much more intuitive and easier to learn. (Some experienced accountants find otherwise.) -As a result of this convention, PTA apps and examples often show equity, liability, and revenue account balances as negative numbers. +Because of this convention, many PTA apps and examples show equity, liability, and revenue account balances as negative numbers. You can get used to reading these signed-number reports in a day or two. -Just remember this to avoid a common confusion: - -- When equity increases (more wealth!) or liability increases (more debt!) or revenue increases (more income!), +Just remember: when equity increases (more wealth!) or liability increases (more debt!) or revenue increases (more income!), their balance is shown as a larger negative number (more negative). Some PTA tools allow flipping the minus signs, or showing traditional debit and credit terminology instead of signed numbers.