End of year processing?

[Doug Laidlaw]

I think that Dale has adequately expressed the limitations of that system.  
To me, in Australia, "close the books" means to carry all income and expense 
balances to a "profit and loss" account for the year in question, then 
transfer the balance of that account to an equity account called "capital" or 
similar.  This is done at the end of each year, and a new profit and loss 
account is created each time.

After this process, your assets and liabilities still show balances for the 
balance sheet, but the income and expense accounts are zero, ready for the 
new year's data.  The "capital" account shows your net worth.  It is created 
when you set up your books, to take the double entry for each asset and 
liability.  The balance of "profit and loss" is your profit or loss for the 
year, and is the figure for income tax.  For this reason, most businesses use 
the same year as the Tax Office.

This system would overcome Dale's problem about pasting old transactions, 
because you are still using the same file.  I have used Quickbooks, but I 
can't say whether a "memorized transaction" list from one file would be 
available for a new file.  I doubt it.

Regards,

Doug.

On Tue,  8 Jan 2002 03:04, you wrote:
> In a message dated: Fri, 04 Jan 2002 09:57:39 PST
>
> Matthew Vanecek said:
> >What do you mean by "close the books"?  Taking it
> >literally, I was not aware that gnucash had such a
> >facility.  And we really don't want to close
> >bank/credit/etc accounts whose balances don't rely on
> >year-end processing but rather on real-time useage.
>
> "Closing the books" refers to deciding upon a period of time for
> which you consider a given set of accounts active.  At the end of
> that time period, you "close the books" and no more activity is
> allowed for that period.
>
> Most people consider 1 year as the default time period.  I "close" my
> books on Dec 31st each year, and "open" a new set on January 1st.
>
> This doesn't mean I close any of my accounts with the bank or cancel
> credit cards, etc.  All it means is that There are no transactions
> after the end-date of Dec. 31st.
>
> This allows you to keep data for specific periods of time separate
> and allow you much smaller and more managable data sets to analyze.
>
> At the end of the year, I export my account list and start a new
> file/"set of books" to record transactions in.
>
> HTH,