> Begin forwarded message: > > From: Anita Graves <anitagra...@mac.com> > Subject: Re: How to close a financial year & how to keep 'earmarked' funds > Date: 25 May 2017 at 6:05:27 PM GMT+3 > To: Derek Atkins <warl...@mit.edu> > Cc: doncram <donc...@gmail.com>, DaveC49 <davidcous...@bigpond.com>, > gnucash-user@gnucash.org > > I am astounded at the amount of help you dear people offer! Thank you very > much. > > After glancing at all the replies, I have decided to back away from any idea > of ‘closing the file’ for the previous year. I say this because a) I am a > novice at GnuCash and b) I have an accountant who will take a look at this > later on and hopefully help out. My only reason for wanting to ‘close’ the > books was in order to properly carry forward any account balances. In my > case, I had some advanced fund balances in the expenses as subaccounts and > was hoping there would be a ‘magical’ way to carry these balances forward, > along with the balances forward in the asset, and equity accounts, but don’t > think I know how to do that. In the end, I just opened the same account tree > in a new file and manually put in these balances. I need help to know how to > account for funds that are ‘earmarked’ (i.e., donated and contributed for > specific purposes and which are not necessarily spent in one year, but > carried forward, showing the expenses to draw them down as they occur, and > other transactions affecting each of these ‘earmarked’ funds, accordingly. > > We are a religious organization, and an international one, so funds could be > contributed ‘earmarked’ for a) the national fund; b) the international fund; > c) repairs and maintenance of the meeting place; e) construction of a house > of worship, etc. > > I would very much like to know how these funds should be entered in the > accounts. You take money from the asset accounts (checking or cash) and put > it in special ‘earmarked’ expense subaccounts, then draw the funds toward > zero as they are spent, and the balances go forward from year to year, if > that is the case. > > Can anyone tell me how to do this? I am in Cyprus, and we are a corporate > entity, a limited company, not non-profit, not charitable. We have no > experience with taxes because our contributions are so small and no one has > ever expressed a need to have their contributions exempted from taxation. > > Thanks to anyone who can help me on this >> On 25 May 2017, at 5:50 PM, Derek Atkins <warl...@mit.edu> wrote: >> >> 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. >
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