Account types

The five basic kinds of Account and the Account types red-ale offers (BANK, CASH, ASSET, CREDIT, LIABILITY, STOCK, MUTUAL, CURRENCY, INCOME, EXPENSE, EQUITY, RECEIVABLE, PAYABLE, TRADING), which Account can sit under which, and what each is for.

Bookkeeping groups everything into five kinds of thing:

Kind	What it is
Assets	Things you own
Liabilities	Things you owe
Equity	Overall net worth
Income	What increases the value of your accounts
Expenses	What decreases it

Your bank balance is an asset, your mortgage a liability, your paycheck income and last night's dinner an expense. How the five relate is the subject of Double entry.

GnuCash divides these further into Account types, and every Account has exactly one. Call account.types for the list with each type's fundamental kind, the kind of Commodity it holds, the types it may sit under and the types it may be changed to once it has Splits.

The types

Type	Fundamental kind	Use it for
`BANK`	asset	Checking, savings and money market accounts
`CASH`	asset	Cash in your wallet or a till
`ASSET`	asset	Other things you own: a house, a car, prepaid items
`RECEIVABLE`	asset	Money owed to you by customers (A/Receivable)
`STOCK`	asset	A holding of a security. ⚠ Shares, not warehouse stock
`MUTUAL`	asset	A holding of a mutual fund
`CURRENCY`	asset	A holding of a foreign currency; deprecated, and cannot be chosen for a new Account
`CREDIT`	liability	A credit card
`LIABILITY`	liability	Other things you owe: a loan, a mortgage
`PAYABLE`	liability	Money you owe vendors (A/Payable)
`INCOME`	income	Salary, interest, dividends, sales
`EXPENSE`	expense	Groceries, rent, fees
`EQUITY`	equity	Opening balances and the owner's stake
`TRADING`	none	Balances multi-currency Transactions; see Trading accounts
`ROOT`	none	The nameless top of the Account tree; one per book, never created by you

⚠ Asset and liability are also accounting ideas wider than the types of the same name: a BANK Account holds an asset in the first sense and is not of type ASSET. When this Manual means the type it writes it in capitals.

What may sit under what

An Account's parent must be compatible with its type, or account.create refuses it:

the asset and liability types (BANK to PAYABLE above) may share a branch with each other and sit directly under the root;
INCOME and EXPENSE may share a branch;
EQUITY goes under EQUITY or the root, and TRADING under TRADING or the root.

A parent that exists only to group others is usually a placeholder: it accepts no Splits. See The chart of accounts.

Changing a type

An Account with Splits can change only to a type compatible with its current one, for example BANK to ASSET. RECEIVABLE and PAYABLE can never change once they have Splits, because business documents depend on them. account.update checks the sub-accounts too when you retype them with their parent.

Expenses and credit cards

An Account of type EXPENSE replaces the "category" of other programs: set one up for each thing you want to track, as detailed or as general as you like, and you can move Transactions between them later. There is nothing to reconcile against, as no statement exists, though you may reconcile one all the same. Its balance only grows; to see one period's spending run an Income Statement, or close the books (Closing the books and the accounting period).

A credit card is a short-term loan, not an expense: the purchases are the expenses, and the card Account (CREDIT) holds what you owe. One payment to the card company is a transfer from your bank Account to the CREDIT Account.