Re: GL Accounts

[DaveC49]

Hi Maf,

Just a slight clarification on what accrual accounting means. 

The GAAP contains certain principles about when income is considered to be
earned and when expenses are considered to be incurred and when they are to
be recognized/recorded in the accounts. These are not necessarily coincident
in time with the receipt of payments for income or the payment by you for an
expenditure for reasons which may be unrelated to you offering or accepting
payment under terms of credit.

In accrual accounting income is for example considered to be earned at the
time when you perform the work that entitles you to receive that income even
though you may not actually receive the payment until some time later (for
example after submitting a report). 

Similarly you may incur an expenditure in accrual accounting terms at the
time you enter into an agreement to purchase something, not necessarily when
you actually make the payment. This can of course complicate the accounting
and can be important in the tax accounting for many business. This is what
defines accrual accounting.

Most tax jurisdictions allow use of a simplified form of accounting (usually
under a specified turnover threshold and under other specified conditions)
where you record in your accounts income at the time you receive the payment
and expenditure at the time you make the payment. This is usually referred
to as accounting on a cash basis or Cash Accounting.

The difference is in the timing of the recording of an event, e.g. the
issuing of an invoice, and is not necessarily related to the use of A/R or
A/P per se. 

These (A/R, A/P) relate specifically to a business providing credit to its
customers under certain terms it specifies or accepting credit from its
suppliers under the terms they specify and they can be used both with
Accrual or Cash accounting. 


David



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Issue opening Gnucash file

[green thumb]

I have been using Gnucash for awhile now.  I am working in Windows 10.  
Recently I tried to open my file and got the error "No suitable backend was 
found for C:...".  When I look at the trace file I see get the message :

* 17:22:17  WARN  Could not spawn perl: Failed to execute child 
process (No such file or directory)
* 17:23:24  WARN  Could not find the icon 'gtk-file'. The 'hicolor' theme
was not found either, perhaps you need to install it.
You can get a copy from:
http://icon-theme.freedesktop.org/releases
* 17:23:28  CRIT  g_utf8_to_utf16: assertion 'str != NULL' failed

I installed the newest Gnucash program (version 2.6.18).

Not sure what to do now.  Would really like to get access to this file again.  
Any ideas or suggestions.



.
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15,000 brazilian mutual funds price quotes. Enjoy!

[aperali]

   Hi guys!
   I have a good news, specially for the owners of around 15,000 brazilian
   mutual funds registered on CVM. / Tenho uma boa notícia, especialmente
   para os proprietários de aprox. 15.000 fundos mútuos registrados na
   CVM.
   Finally I managed to collect them and format the way they can be read
   by KMyMoney and perhaps GnuCash (I dont have it installed here). /
   Finalmente consegui coletar e formatar de maneira a serem lidos pelo
   KMyMoney e talvez pelo GnuCash também.
   All you need to do is to configure KMM Online Quotes and point your
   investment to this new source! / Tudo que precisa fazer é configurar as
   cotações online do KmyMoney e apontar seus investimentos para essa nova
   fonte.
   Detailed instructions (portuguese only) are here / Mais detalhes aqui:
   http://fundos.eastus.cloudapp.azure.com/
   I'll keep them daily updated. / Manterei atualizados diariamente (de
   acordo com a CVM).
   Hope you enjoy it (I did!) / Espero que gostem!
   *** Image you can do the same with brazilian CDs!! Soon! / Imagine
   poder fazer o mesmo com CDBs/CDIs!!! Aguardem! ***
   Same post here in KMyMoney forum:
   https://forum.kde.org/viewtopic.php?f=69=143168
   Cheers / Abraços,
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Re: How to create an asset with a reduced value compared to my regular currency (dollars)

[Adrien Monteleone]

Michael,

I don’t regularly deal with loan entries, and each jurisdiction is different, 
but in the U.S., loan forgiveness (the technical term I believe is 'discharge 
of indebtedness') is often considered a source of income and is generally 
taxable. That 10% annual forgiveness would likely have to be booked against 
income.(note the qualifications of ‘often’, ‘generally’, ‘likely’ — your 
mileage may vary)

As for an art purchase with potential capital gain or loss, there’s no entry 
required if you find out the artist was different. You book what you actually 
paid at the buy and you book what you actually received on the sale. The 
difference is either a gain or loss. ‘Expected' gain or loss is mostly for your 
own curiosity and probably should not be reflected in financial books. The 
value of an asset in financial books is never what it ‘might’ or ‘should’ be 
worth. The asset is only *actually* worth what was paid for it.

An adjusted asset value is going to happen for a particular reason. Either it 
is a correction of an erroneous initial value where a simple correcting entry 
solves the problem, or it is a specified write-down such as depreciation which 
is balanced by an expense. (essentially a ‘use’ transaction of a pre-paid 
expense) You don’t generally realize an increase in an asset value short of a 
correcting entry until and unless the asset is sold. (This is why special 
trading accounts are used to track present value of securities separately 
without actually adjusting the underlying asset value.)

Anything else would be a shift from one asset to another.

As for liability changes, again, these are either correcting entries to fix 
errors, shifts to other liabilities (a credit card balance transfer for 
example) or income. (debt you no longer owe and don’t have to pay)

The question of if those events are taxable or not depends on your local taxing 
jurisdiction and specific circumstances should be answered with the guidance of 
a CPA.

And I’m no CPA either, just passing along what I’ve learned in school and 
having to find these answers for myself over the years.

Regards,
Adrien

> On Dec 8, 2017, at 9:23 AM, Mike or Penny Novack 
>  wrote:
> 
> On 12/7/2017 5:53 PM, David Carlson wrote:
>> Adrian,
>> 
>> While I am not an accountant, historically I have used a method similar to
>> that suggested by Adrien.  However, I am intrigued by the answer provided
>> by Michael Novack, as it avoids the problem of overstating potentially
>> taxable income without needing to have a group of accounts to segregate
>> before running your tax reports at the end of the year.
>> 
>> Thus I am considering switching to a method modeled on his suggestion.
>> 
>> David C
>> 
> There are other situations which might call for the adjustment of an asset 
> value (or liability amount) that should not be considered either income or 
> expense. I suggest looking in accounting texts with the topic probably under 
> "journal entries". Some examples:
> 
> a) Back in the 60's I went to school with the help of NDF loans. There might 
> be something similar today. They had a condition on the liability amount. 
> Could treat these are ordinary loans BUT every year you taught forgave 10% of 
> the loan.
> 
> b) When you opened your books, one of the major asset categories was art 
> work. Yes, if you sold a picture for a greater amount than its book value, a 
> capital gain (or for less, a capital loss). But suppose instead a picture 
> thought to be by artist A was later discovered to have been by artist B (with 
> VERY different values).
> 
> I am NOT an accountant. But I think these would be handled by "journal entry" 
> adjustments with equity being the other side of the transaction.
> 
> Michael
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Fwd: Re: GL Accounts

[Maf. King]

--  Forwarded Message  --

Subject: Re: GL Accounts
Date: Friday, 8 December 2017, 16:38:49 GMT
From: Maf. King 
To: Caleb Walker 

On Friday, 8 December 2017 14:52:04 GMT you wrote:
> Thank you Mr. King for your response.  My question is not about accounting
> principles but more so how do I do that in GC.  When I go to “Process
> Payment” the only thing available to “Post To” is “Assets:Accounts
> Receivable”.  I cannot put anything else in there nor can I put multiple
> accounts in there.  Also in the “Transfer Account” section I can only
> choose one account.  However, in processing a payment it should normally
> debit a cash account but having the freedom to debit or credit any account
> would be useful.
> 
> Then I went to create an invoice and in the "Invoice Entries” section I can
> only select and Income Account in the “Income Account” column.  I tried to
> type in an equity account like “Equity:Opening Balances:Caleb Startup
> Capital” and the program said that the account did not exist.
> 
> I have followed these same examples in A/P as well to no avail.  Is there a
> config file I need to edit to allow me to get out of this “jail” where the
> program is forcing me to shoe-horn my processes?  I also cannot find a way
> to do a “split transaction” yet.  I am still looking though.


Hi Caleb,

GC _started_ long ago without any particular special treatment for accrual 
accounting, primarily for personal accounting.  One just directly entered all 
transactions in (say ) a bank account register and assigned transactions to 
the relevant "other" account(s).

   Then, around version 1.6 or 1.8, a module known as "business features" was 
added, which introduced the handling of A/P and A/R as special account types 
and permitted accrual accounting without having to fudge about.

So, if you are using accruals - you receive a bill and expect to pay it at 
some time later on - you _can_ create a vendor, enter the bill in the 
"business" features.  You are correct that at the point of entering a bill, 
you cannot assign the transactions to any account - income types are not 
valid, for example.  However, Vendor bills would usually be for an expense (or 
capital asset purchase) and asset & expense accounts are all valid 
destinations.  When you come to actually pay the bill, you go to the process 
payment, and select the bill.  At this point, the bill is tied to you A/P 
account and so half the transaction is known.  The other account you select 
can be any bank or cash account.

If, however, you are not using accruals, but paying directly for something in 
cash (let's say a business lunch out with a client), you don't touch vendor 
bills or process payment at all.  Just open your cash account (or credit card 
or checking etc. - however you actually paid), and directly enter the 
transaction with a transfer to Expenses:EntertainingClients

similarly with invoices.  If you haven't created an customer invoice in GC, 
there is nothing to process payment against.  Cash sales don't use accruals. 

  You didn't issue an invoice for your owner capital (at least, I assume you 
didn't.  More likely a share certificate after the fact).  Just open the bank 
account, and create a transaction transferring from Equity:OwnerCapital:Caleb 
- if that account doesn't exist, GC will offer to create it for you.

Split transactions: (if you are not using "view->auto-split ledger") right  
click on the area of the register where you are entering a transaction, and 
select "split transaction", or press the tool button marked "split"


in summary: if it isn't a "proper" accrual transaction, don't use the accruals 
subsystem!  Enter directly in the relevant Bank/Cash/Credit Card registers.

HTH,
Maf.

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PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 C542



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Re: GL Accounts

[Maf. King]

On Friday, 8 December 2017 14:52:04 GMT you wrote:
> Thank you Mr. King for your response.  My question is not about accounting
> principles but more so how do I do that in GC.  When I go to “Process
> Payment” the only thing available to “Post To” is “Assets:Accounts
> Receivable”.  I cannot put anything else in there nor can I put multiple
> accounts in there.  Also in the “Transfer Account” section I can only
> choose one account.  However, in processing a payment it should normally
> debit a cash account but having the freedom to debit or credit any account
> would be useful.
> 
> Then I went to create an invoice and in the "Invoice Entries” section I can
> only select and Income Account in the “Income Account” column.  I tried to
> type in an equity account like “Equity:Opening Balances:Caleb Startup
> Capital” and the program said that the account did not exist.
> 
> I have followed these same examples in A/P as well to no avail.  Is there a
> config file I need to edit to allow me to get out of this “jail” where the
> program is forcing me to shoe-horn my processes?  I also cannot find a way
> to do a “split transaction” yet.  I am still looking though.


Hi Caleb,

GC _started_ long ago without any particular special treatment for accrual 
accounting, primarily for personal accounting.  One just directly entered all 
transactions in (say ) a bank account register and assigned transactions to 
the relevant "other" account(s).

   Then, around version 1.6 or 1.8, a module known as "business features" was 
added, which introduced the handling of A/P and A/R as special account types 
and permitted accrual accounting without having to fudge about.

So, if you are using accruals - you receive a bill and expect to pay it at 
some time later on - you _can_ create a vendor, enter the bill in the 
"business" features.  You are correct that at the point of entering a bill, 
you cannot assign the transactions to any account - income types are not 
valid, for example.  However, Vendor bills would usually be for an expense (or 
capital asset purchase) and asset & expense accounts are all valid 
destinations.  When you come to actually pay the bill, you go to the process 
payment, and select the bill.  At this point, the bill is tied to you A/P 
account and so half the transaction is known.  The other account you select 
can be any bank or cash account.

If, however, you are not using accruals, but paying directly for something in 
cash (let's say a business lunch out with a client), you don't touch vendor 
bills or process payment at all.  Just open your cash account (or credit card 
or checking etc. - however you actually paid), and directly enter the 
transaction with a transfer to Expenses:EntertainingClients

similarly with invoices.  If you haven't created an customer invoice in GC, 
there is nothing to process payment against.  Cash sales don't use accruals. 

  You didn't issue an invoice for your owner capital (at least, I assume you 
didn't.  More likely a share certificate after the fact).  Just open the bank 
account, and create a transaction transferring from Equity:OwnerCapital:Caleb 
- if that account doesn't exist, GC will offer to create it for you.

Split transactions: (if you are not using "view->auto-split ledger") right  
click on the area of the register where you are entering a transaction, and 
select "split transaction", or press the tool button marked "split"


in summary: if it isn't a "proper" accrual transaction, don't use the accruals 
subsystem!  Enter directly in the relevant Bank/Cash/Credit Card registers.

HTH,
Maf.


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Re: GL Accounts

[Adrien Monteleone]

Caleb,

Just a word of caution.

Certainly, not all transactions need to go through the business features and 
you can make manual transactions to accounts other than the built-in AR/AP 
accounts.

However, don’t make manual transactions in or to these accounts either. If you 
do, the business features can’t ‘see’ them. They can only see transactions 
created via the business features themselves.

If you would need to make AR/AP transactions in a manual fashion and no way 
around that, then the recommendation is to create additional AR/AP accounts 
such as ‘Other Accounts Receivable’ or ‘Other Accounts Payable’ and use those 
for such purposes. For example, I have some old debts that I didn’t want to 
enter the original bills and all payment history for. I created a liability 
account under a ‘Old Debts’ liability for each one. That way I can make manual 
payment transactions and still see the remaining balance for each. The business 
features aren’t aware of any of that activity, but my balance sheet report 
includes it.

Also, using the business features, you CAN pay or receive to accounts other 
than AR/AP. Just select the account you want in the drop down when posting the 
invoice/bill. If there are no other options in the drop down yet, click the 
‘new’ button and add a new liability/asset account. (this means it can’t have 
existed already) This will add a new account and allow it to be ‘seen’ by the 
business features. It should then be selectable in the future.


Regards,
Adrien

> On Dec 8, 2017, at 3:11 AM, Maf. King  wrote:
> 
> Hi Caleb, 
> 
> welcome to the list.  Answers inline...
> 
> On Thursday, 7 December 2017 17:56:18 GMT Caleb Walker wrote:
>> Hello All,
>> 
>> I am trying to use GNUCash like I use Sage 100 understanding it is not as
>> full featured as Sage but might be ok with another business I am starting. 
>> What I would like to do is make payments to something other than AP or
>> receive invoices to something other than AR.  Is that possible? 
> 
> Yes.  if a transaction isn't a AP purchase, why would you shoe-horn it into 
> AP?  EG. you buy something with cash. the transaction is Assets:CashOnHand -> 
> Expenses:Whatever, which you can record perfectly easily in GC.  
> 
>> One
>> example, I made a payment to my landlord and part of it was a deposit which
>> I would like to go into an asset account and the other part is rent which
>> would go into an expense account. How do I do that with this software? 
> 
> You'd need a "split transaction", so £100 from Assets:Bank can be split to 
> any 
> other number of accounts - eg £30 to assets:landordDeposit, and £20 to 
> Sales:tax and £50 to expenses:rent
> 
>> Another example, I received cash into the account that I would like to tie
>> into an equity account to show owners startup capital.  How do I easily get
>> the money over there?  Thank you for your help
> 
> Assets:Bank <- Equity:OwnerCapital:CalebWalker would be one way.
> 
> I suggest you give an hour or two to the tutorial & concepts guide at some 
> point which will cover these questions in more depth. See 
> http://gnucash.org/viewdoc.phtml?doc=guide
> 
> Good luck with your new venture.
> Maf.
> 
> 
>> 
>> Caleb
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> 
> 
> -- 
> Maf. King
> PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 C542
> 
> 
> 
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Re: GL Accounts

[Maf. King]

Hi Caleb, 

welcome to the list.  Answers inline...

On Thursday, 7 December 2017 17:56:18 GMT Caleb Walker wrote:
> Hello All,
> 
> I am trying to use GNUCash like I use Sage 100 understanding it is not as
> full featured as Sage but might be ok with another business I am starting. 
> What I would like to do is make payments to something other than AP or
> receive invoices to something other than AR.  Is that possible? 

Yes.  if a transaction isn't a AP purchase, why would you shoe-horn it into 
AP?  EG. you buy something with cash. the transaction is Assets:CashOnHand -> 
Expenses:Whatever, which you can record perfectly easily in GC.  

> One
> example, I made a payment to my landlord and part of it was a deposit which
> I would like to go into an asset account and the other part is rent which
> would go into an expense account. How do I do that with this software? 

You'd need a "split transaction", so £100 from Assets:Bank can be split to any 
other number of accounts - eg £30 to assets:landordDeposit, and £20 to 
Sales:tax and £50 to expenses:rent

> Another example, I received cash into the account that I would like to tie
> into an equity account to show owners startup capital.  How do I easily get
> the money over there?  Thank you for your help

Assets:Bank <- Equity:OwnerCapital:CalebWalker would be one way.

I suggest you give an hour or two to the tutorial & concepts guide at some 
point which will cover these questions in more depth. See 
http://gnucash.org/viewdoc.phtml?doc=guide

Good luck with your new venture.
Maf.


> 
> Caleb
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-- 
Maf. King
PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 C542



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GL Accounts

[Caleb Walker]

Hello All,

I am trying to use GNUCash like I use Sage 100 understanding it is not as full 
featured as Sage but might be ok with another business I am starting.  What I 
would like to do is make payments to something other than AP or receive 
invoices to something other than AR.  Is that possible?  One example, I made a 
payment to my landlord and part of it was a deposit which I would like to go 
into an asset account and the other part is rent which would go into an expense 
account. How do I do that with this software?  Another example, I received cash 
into the account that I would like to tie into an equity account to show owners 
startup capital.  How do I easily get the money over there?  Thank you for your 
help

Caleb
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