Close Book?

Derek Atkins warlord at MIT.EDU
Tue Dec 2 18:30:04 EST 2008


Hi,

Quoting Peter Randall <peter.randall1 at googlemail.com>:

> I am trying to build my first GNUcash file for personal accounting. So far I
> have built and populated a fairly conventional structure with the usual
> suspects. However I am struggling to make Equity respond to changes in the
> other main accounts. For instance if I add an income item to the Current
> (Checking) account this shows, as you might expect, as an increase in the
> main Assets account, but it does not produce any change in the Equity
> account.
> I believe this might have something to do with the Close Book function found
> under the Tools drop-down menu which on one occasion did make the
> Equity+Liability=Assets equation balance. But but now it stubbornly refuses
> to have any effect on Equity. I cannot find any reference to the 'Close
> book' function in the Tutorial & Concepts Guide.
>
> Any help would be much appreciated.

You're conflating Equity Accounts with your Instantaneous Equity.
Remember that the accounting equation isn't just that Eq = A - L
but really it's Eq = A - L + In - Ex.  What this means is that Income
and Expense count towards your Instantaneous Equity.  Some of this
is in the FAQ:

http://wiki.gnucash.org/wiki/FAQ#Q:_What_are_debits_and_credits.3F

You can compute your Instantaneous Equity by running a Balance Sheet
Report.  This is the recommended method to see your equity at any
point in time.

The Close Books functionality is new enough so it's not documented.
However it is referenced in the FAQ:

http://wiki.gnucash.org/wiki/FAQ#Q:_Is_there_book-closing_support.2C_yet.3F

However you should only run this when you really want to close the books,
like at the end of an Accounting Period (like once a year).

I hope this helps.  I'm sure you'll get other replies too.

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-derek

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



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