Hi Michael An equation is not changed if terms are transposed from one side to another with a change of sign. It is still equally valid. I rearranged the extended fundamental accounting equation including the temporary accounts from
Assets =Liabilities +Equity +( Income - Expenses) to Assets - Liabilities = Equity + (Income - Expenses). This is still the same fundamental accounting equation. The point of expressing it in this form is that any point in time if the books are correctly maintained, the total of the balances of Assets - Liabilities must equal the total of the balances of Equity, including the temporary account balances, the nett of which is the Retained Earnings balance. This is a mathematical reality. It is irrespective of whether the books have been formally closed or not as that only transfers the temporary equity account balances to the permanent Equity account balance and does not affect the Assets and Liabilities balances. A balance sheet at the time the old books cease operation must satisfy the accounting equation. My basic assertion is that if all the balances of the Assets and Liabilities accounts are transferred to the new books (but not the Equity and Income and Expense account balances) the Opening Balance entries to Equity implicitly contain the total contributions to Equity in the old book at the time the balances are transferred, negating any need to separately have an explicit Opening Balance for a Retained Earnings account. David ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list [email protected] 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.
