Somebody should write a proper "accounting for regular people" guide, because I too find those terms confusing - and also completely separated for
any experience
ever that I had with money. And it only gets worse from there, with "accounts receivable" and "accounts payable". Is that an American thing? I try not to fall into the trap of being proud of my own ignorance; but after many hours of reading introductory accounting articles linked by various accounting software sites, I still don't get any of it.
I'd love a cheat-sheet or plain-English example of how to model the following with GAAP: I'm an individual, I have couple bank accounts, get a salary and occasional invoice, I pay for various stuff, I sometimes use cash. I do not own shares in companies. I want to do budgeting, including some sort of "envelopes" or "virtual accounts" so that I can earmark some money for particular use. I tried to build something like that with Ledger CLI several times now, but I always bounce off the confusion about terminology, and not knowing what goes into "Equity", what into "Liabilities", etc., and why does everything expect me to have "accounts payable" and "receivable"...
Knowing what's the proper, idiomatic representation of such financial system would go a long way towards me understanding what the hell all those terms mean.
I'd love a cheat-sheet or plain-English example of how to model the following with GAAP: I'm an individual, I have couple bank accounts, get a salary and occasional invoice, I pay for various stuff, I sometimes use cash. I do not own shares in companies. I want to do budgeting, including some sort of "envelopes" or "virtual accounts" so that I can earmark some money for particular use. I tried to build something like that with Ledger CLI several times now, but I always bounce off the confusion about terminology, and not knowing what goes into "Equity", what into "Liabilities", etc., and why does everything expect me to have "accounts payable" and "receivable"...
Knowing what's the proper, idiomatic representation of such financial system would go a long way towards me understanding what the hell all those terms mean.