On 1/3/22 14:50, Jesse MacDougall wrote:
Hi Ryan I am pro accountant.
Closing books means no one can post for that period anymore. So u close
GnC will let you continue to post transactions to prior years even
though you may have executed the "Close Books" for that year.
books once your have completed your final review and maybe got some entries
from an accounting firm like me. You probs dont need an accounting firm
though so once all your transactions are in and your cash account agrees to
your bank account you now make your year end entries. Then close.
You dont create a new set of chart of accounts. They roll forward each
year. I think of chart of accounts as the framework of a skyscraper
building being built. Chart of accounts are your financial infastructure.
On Mon., Jan. 3, 2022, 10:31 Ryan Carver, <[email protected]> wrote:
Hi All,
I am using Gnucash for my small business (a design consultancy) and I have
no experience or knowledge of accounting.
Could someone please explain the PROs & CONs of using the “Close Books”
feature in layman’s terms?
The online database states that using the “Close Books” tool will result in
some report inaccuracies. Could someone elaborate on which reports would
result in inaccurate reports? I ran a few test reports after using the
“Close Book” tool and I did not notice any report inaccuracies.
Given my limited accounting knowledge it only seems intuitive that one
would always want to reset their chart of accounts for each fiscal year so
you can quickly see the correct period totals for each account.
I don't. Closing the books for me just means I get to create an account
in the Equities section that I get to label "Retained Earnings for 2021"
(or whichever year I was closing).
It's not needed -- just my preference. So, only the Income and Expense
accounts and this one Equity account have entries made against them.
Otherwise, everything else remains the same.
If you don't close the books, the Life-to-Date retained earnings will
show up in that portion of the P&L. If you close the books, then there
will be no retained earnings on that portion of the P&L (until you have
transactions in the non-closed year). This will be because you booked
them via the closing transactions to your own retained earnings account.
What does everyone else do when starting a new fiscal year?
As little as possible.
Thanks,
Ryan Carver
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