On Sun, Mar 25, 2018 at 09:34:58AM -0400, Mike or Penny Novack wrote: > [...] it is usual to start a set of books JUST from the balance sheet > with income and expense zero.
This is what I was going to suggest -- very tentatively and with many caveats that I'm not an accountant. Since Mike (I believe) is one, I feel on much firmer ground amplifying on what he said: 1. Start with opening-balance entries for the Balance Sheet accounts -- but as of the previous year end, *not* as of the cutover date (9-30 in your case) -- and opening balances of zero for the Income Statement accounts This is what your GnuCash books would have looked like on Jan. 1 if you had cut over to it then. 2. For each Income and Expense account, enter one rolled-up summary transaction. Its date should be the cutover date, and its amount should be the account's balance as of that date. All of these should be against some Asset account (see below) At this point, the Income and Expense balances will be correct as of the cutover date, but the Assets and Liabilities will be wildly out of whack, because your summary entries won't have even tried to reflect whether, for example, that widget you bought at Office Depot on July 15 came out of Petty Cash, from the Bank account (via debit card), or from a Liability account (via credit card). So now: 3. Make adjusting entries to move money among the Asset and Liability accounts to bring them into agreement with reality If I were doing it, I'd probably create a dummy asset account specifically for this purpose, to make clear that it doesn't correspond to any real-world store of value. In particular: - the dummy account would start step (2) with a balance of zero (no opening balance, and no txn's yet) - after step (3), its balance should automagically end up back at zero because everything just works out -- if that doesn't happen, go back and look for errors - In between those points, the dummy account's balance doesn't signify anything, so if it goes negative, no big deal My non-accountant-ness means that I can only guess at how Equity figures into all this. Rather than do so -- possibly very wrongly -- I'll leave that piece for someone else to please fill in. I also don't know whether the dummy-asset-account idea would remotely pass muster among real accountants. - Eric _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.