I'm trying to bring some organization to my personal finances. I'm looking at tools like GnuCash, but I'd like to really understand how they work, and after reading bits and pieces about double entry accounting I'm still confused on a few points.
Let's say I have a series of transactions that looks something like this:
|1/1/2021||Opening balance||1000||Bank:Savings||Equity:Opening balance|
|1/1/2021||Opening balance||1000||Bank:Checking||Equity:Opening balance|
That gives me account balances that look like:
Assuming I've categorized things correctly there, I can plug those values into assets = liabilities + equity (or assets = liabilities + capital + revenues – expenses) and get:
(2900 + 1000 + 100) = (10 + 2000 + 2000 - 10)
4000 = 4000
So that all seems to work, but is it correct?