{\rtf1\ansi\ansicpg1252\cocoartf949\cocoasubrtf460
{\fonttbl\f0\fmodern\fcharset0 Courier;}
{\colortbl;\red255\green255\blue255;}
\pard\tx560\tx1120\tx1680\tx2240\tx2800\tx3360\tx3920\tx4480\tx5040\tx5600\tx6160\tx6720\sl264\slmult1\ql\qnatural\pardirnatural

\f0\fs28 \cf0 Accountants will talk of ``credits'' and ``debits'', but the meaning\
is often different from the layman's understanding.  To avoid\
confusion, Ledger uses only subtractions and additions, although the\
underlying intent is the same as standard accounting principles.\
\
Recall that every posting will involve two or more accounts.\
Money is transferred from one or more accounts to one or more other\
accounts.  To record the posting, an amount is @emph\{subtracted\}\
from the source accounts, and @emph\{added\} to the target accounts.\
\
In order to write a Ledger transaction correctly, you must determine where\
the money comes from and where it goes to.  For example, when you are\
paid a salary, you must add money to your bank account and also\
subtract it from an income account:\
\
@smallexample\
9/29  My Employer\
    Assets:Checking                           $500.00\
    Income:Salary                            $-500.00\
@end smallexample\
\
Why is the Income a negative figure?  When you look at the balance\
totals for your ledger, you may be surprised to see that Expenses are\
a positive figure, and Income is a negative figure.  It may take some\
getting used to, but to properly use a general ledger you must think\
in terms of how money moves.  Rather than Ledger ``fixing'' the minus\
signs, let's understand why they are there.\
\
When you earn money, the money has to come from somewhere.  Let's call\
that somewhere ``society''.  In order for society to give you an\
income, you must take money away (withdraw) from society in order to\
put it into (make a payment to) your bank.  When you then spend that\
money, it leaves your bank account (a withdrawal) and goes back to\
society (a payment).  This is why Income will appear negative---it\
reflects the money you have drawn from society---and why Expenses will\
be positive---it is the amount you've given back.  These additions and\
subtractions will always cancel each other out in the end, because you\
don't have the ability to create new money: it must always come from\
somewhere, and in the end must always leave.  This is the beginning of\
economy, after which the explanation gets terribly difficult.\
\
Based on that explanation, here's another way to look at your balance\
report: every negative figure means that that account or person or\
place has less money now than when you started your ledger; and every\
positive figure means that that account or person or place has more\
money now that when you started your ledger.  Make sense?}