RFC: A "book-close dialog" to help auto-zeroize all Inc/Exp accounts
Mike or Penny Novack
stepbystepfarm at mtdata.com
Mon Dec 24 09:34:53 EST 2007
>> The other issue is the fact not really how traditional accounting
>> would do this. More usual is a temporary equity account (receiving
>> total income and total expenses) which is then closed to retained
>> equity with a single entry, either gain or loss for the year (thus
>> making it clear which the case was).
> I was planning to close all the accounts in a single transaction.
> Actually, two, one transaction for income and one for expense.
I understood what you were doing. Now let me try to explain why that
MIGHT be an issue.
The result you have is two transactions, one representing total income
and one representing total expenses. But the absolute magnitude of these
two amounts is of little interest while the difference between them and
especially the sense of that difference is considered of paramount
importance (oh the famous lines from Dickens's "David Copperfield" say
that so much better).
So yes, your users can see whether the total income amount or the total
expenses amount is the greater and perhaps even do a rough subtraction
in their head BUT they probably would prefer a single amount clearly
labeled as a "gain" or "loss" for the year. Which is why the traditional
method was as it was (and from that temporary account the "profit and
loss" report easily produced).
Now equity accounts are "standing" accounts. Not entirely crazy for the
"close the books" function to require the existence of a named equity
account to be used for the closing process. The closing function would
then generate THREE (instead of two) transactions (total income, total
expenses, and gain (or loss) for the year).
PS: We (MA Chestnut Foundation) will probably agree to adopt GnuCash at
the January board meeting after I present my recommendation. After which
I presumably will become available to work on some of the things
desired. But also likely to at first be working on the special report
formats generally used by non-profits (we have so few
accounts/transactions that no big deal to close the books manually so an
autoclose not my highest priority). If I get involved, would have to be
considered a "serious" resource (retired senior analyst with a few
decades experience designing/writing/debugging financial business software).
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