Zeroing out income and expense accounts

[Beth Leonard]

On Mon, Jan 02, 2006 at 01:09:27PM -0500, Derek Atkins wrote:
> Quoting Steve Drach <Steve.Drach at sun.com>:
> 
> >>I add a transaction that negates the sum of all previous transactions.
> >
> >And how do you match that transaction?  Does it go back to an Equity  
> >account?  Like Equity -- year end?
> 
> I use Equity:Retained Earnings.

Yes, equity is a good place to put those transactions, from the
accounting equation:

Assets - Liabilities = Equity + (Income - Expenses)

I actually make a separate account for each year income and
expense:

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.  In
March or April when I get my tax info to my accountant I'll ask
her how I *should* be doing this.  But this has worked so far
for us.

--Beth 
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+                             Beth Leonard                          +
+       O say, does that star-spangled banner yet wave              +
+       O'er the land of the free and the home of the brave?        +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++