End of year question
Bill Wohler
wohler at newt.com
Sun Apr 2 18:27:15 EDT 2006
Beth Leonard <beth at oasis.slimy.com> writes:
> Now I go back to my continuing expenses.gnucash file, the same
> one as before. I create a transaction in each income and
> expense account dated 12/31/05 that makes the account balance
> go to zero. The balancing accounts are:
>
> Equity:Retained Earnings:2005 Year End Expenses
> Equity:Retained Earnings:2005 Year End Income
>
> I name the transactions names like "Year End Groceries"
> "Year End Phone" etc. so that looking down the year end account
> gives me quick glance good idea of where I spent my money.
...
> Good luck! If anyone else has ideas or best practices, I'd love
> to hear them.
Thanks for your description. I just did that for 2003, 2004, 2005, and
I like the results. Kind of scary when you see the annual expenses
staring you in the face!
I varied your technique in the following ways which I'd like to share
with you and the Gnucash readers.
I used the accounts
Equity:Retained Earnings:2005:Expenses
Equity:Retained Earnings:2005:Income
That way you can see the 2005 account balance to see your profit (or
loss) for the year and more easily compare this number from year to
year.
I used the source account name for the transaction's description. If
the descriptions on a given day were sorted, the transactions would
appear similar to your account tree which might make it easier to
navigate. While "Year End *" is easy enough to remember next year,
using the account's name might be even easier to remember (which will
help dredge up the memorized transaction).
Finally, I created these transactions for all accounts except for my
Expenses:Auto:Jeep:Parts and Expenses:Auto:Jeep:Service accounts.
Instead, I created a separate balancing transaction in Expenses:Auto to
zero out the Expenses:Auto account overall. The reason for this is
that I am interested in the total cost of ownership of my vehicle. I
can get the annual cost of ownership with a report; had I added
Retained Earnings transactions, I would not be able to get the total
cost.
--
Bill Wohler <wohler at newt.com> http://www.newt.com/wohler/ GnuPG ID:610BD9AD
Maintainer of comp.mail.mh FAQ and MH-E. Vote Libertarian!
If you're passed on the right, you're in the wrong lane.
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