doncram <donc...@gmail.com> writes: > The advice to Anita to close a year's books, with warning present in the > that doing so will destroy usability of reports henceforth, is quite > alarming! What is meant by "closing" in GnuCash-jargon seems different > than what is meant more usually in accounting.
AFAIK all the reports properly handle the Close Books tool. > In an entirely manual accounting, closing the books at the end of year or > other period involves several steps: > 1. Recognize accruals (non-cash entries) such as: > **depreciation > **allowance for bad debt (uncollectible accounts) > **accrue payroll liabilities (assuming payroll date was not at the end of > year, some liability of salaries and benefits needs to be accrued > **accrue tax liabilities > **other adjusting entries (to adjust assets and liabilities) > 2. Make journal entries transferring expense and revenue account balances > to income statement summary accounts, i.e. generating an income statement > 3. Close the income statement summary accounts to retained earnings > 4. Freezing forever the accounts for the period (in software, this would be > done by putting a lock on any transactions before the new period) > > I am guessing that GnuCash does not support #4. > I gather that in GnuCash, #2 and #3 don't need to be done, because the > income statement report already exists. And if they are done anyhow then > usability of reports will be destroyed. A user wants to be able to > generate reports from prior years, e.g. for making comparisons. > About #1, advising Anita how to proceed would require some more information > on what the current balance sheet shows and what assets and liabilities > need to be updated. The current tool just rolls up all the Income and Expense accounts into Equity, basically zero-izing the Income and Expense accounts in the CoA for the new period. That's all it does. It's useful if you want your Income/Expense CoA balances to show the "current period" balance instead of "since inception" balances. And no, it's not required because all the reports will properly deal with the behavior with or without closing the books. You're correct that GnuCash does not support #4, and indeed no piece of software with a writeable database can. Those that claim to do so are lying; what they mean is that you cannot do it through the UI, but that doesn't mean you cannot do it. > Anita, does this begin to help? And could anyone else clarify? I > personally am willing to help update the GnuCash documentation about > closing, as this is important! > > cheers, Don > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. -derek -- Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory Member, MIT Student Information Processing Board (SIPB) URL: http://web.mit.edu/warlord/ PP-ASEL-IA N1NWH warl...@mit.edu PGP key available _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.