Close books trashes Income Statement and Net Income on Balance Sheet

Derek Atkins warlord at MIT.EDU
Mon Feb 8 12:23:24 EST 2010

z33b0b at writes:

> On Mon, Feb 8, 2010 at 8:11 AM, Derek Atkins <warlord at> wrote:
>     JT Morée <moreejt at> writes:
>     > I realize my post was long but in short I believe the best solution is
>     to have the reports be smarter.  It's not difficult (almost done in fact)
>     and it avoids the fiscal year problem you mention.
>     This is only part of the solution.  There isn't really enough
>     information in the current data.  We would really need an actual period
>     indicator in order to indicate which period a transaction belongs to.
> Color me confused -- why couldn't GnuCash just use the transaction date?  If
> an invalid or imaginary date is used as the period end, then anything before
> one such date (and after another, for past periods) would belong to a certain
> period.  No? 

Because the period of the date in which you post the account might not
reside in the period to which the transaction applies.  This is
particularly important for things like A/R and A/P.  If you perform Cash
based accounting then you need to apply your Income and Expense when the
payment happens, not when you book the invoice/bill.  So in this case
the invoice/bill txn does NOT apply to the period in which it is dated.

> Cheers,
> -- Erik Anderson


       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL:    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available

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