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 <[email protected]> wrote: > > doncram <[email protected]> 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 > [email protected] PGP key available > _______________________________________________ > gnucash-user mailing list > [email protected] > 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. _______________________________________________ gnucash-user mailing list [email protected] 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.
