"Close Books" revisited - was Re: Account Balances Louse-up? .

[Mike or Penny Novack]

 I don't use the automated "close the books" instead choosing to do it 
manually so I don't see to what you are referring BUT it makes perfect 
sense to me.

Closing the books means creating transaction(s) that close each income 
or expense account (temporary accounts of fundamental type equity) into 
the permanent account equity. In other words, when doing this manually I 
am creating two split transactions. On both the unsplit side is the 
total of all the income (or expense) accounts going to equity and on the 
other the split amounts being the balances of each income (or expense) 
account.

About the only thing that looks the least strange to me I might feel 
better seeing Equity : Expense Total (based on which side debit and 
which credit) but I imagine THAT would be confusing to other end users 
who like yourself "knowledge of accounting practice is close to zero"

However I'd like to make a generally useful suggestion for whenever you 
come up with a "I don't know what it will do" situation. Not only with 
GnuCash but pretty much any software.
1) Make a copy of your data. In this case that would be the file which 
are your books. To be really safe, can even move this off into a test 
directory or even a test "region" (a separate log in with its own data 
area, etc.)
2) Open THAT (the test copy) with GnuCash, try this thing you are 
uncertain about, see what happens. Worst case scenario you destroyed 
this test copy. Big deal.
3) You can repeat this while studying this new thing to do. Delete the 
test copy and make another fresh one, try again.
4) When satisfied all is working well, go back and do it for real (open 
your real data)

Michael D Novack, FLMI

PS --- Will say it again. GnuCash is an accounting TOOL. GnuCash makes 
doing your bookkeeping/accounting easy. But as with any tool, even 
complete knowledge in the use of the tool (how to handle it) does NOT 
mean you know how to make good use of the tool, what sorts of things you 
can do with it. You still must acquire some basic bookkeeping/accounting 
knowledge. It may look otherwise with some of the commercial 
alternatives available but you are ignoring the way that is achieved 
with specialized versions for each purpose (thus things like "QuickBooks 
Pro for the Contractor" version vs "Quickbooks Pro for the Hourly 
Biller" vs "QuickBooks Pro for the Non-Profit" vs .....).

PSS --- BTW, the decision to "close the books" or not is one you make 
independent of "end of year". GnuCash can create the end of year reports 
(and recreate then later) independently of whether or not you closed the 
books. The only benefit of closing the books is when wanting to be able 
to (easily) see the balances of each income or expense account for the 
current period, not having to apply a date to that view. It is a 
TRADITIONAL thing to do dating back to the days of bookkeeping in bound 
books pen and ink on paper when you would want to open a new book for 
the new period else after a couple years you would be able to lift the 
darned thing.

>This time round I really want to invoke "Close Books"; 30 June is the
>end of our Financial Year!
>
>When clicking on the "Close Books" option, I get a little window with
>default entries that reads currently:
>
>Income Total :  Equity
>Expense Total: Equity
>
>Other options are available - e.g. I could select "Equity:Opening
>Balances" or create a new account.
>
>Before I <accept|change> the offered option, I would really like to
>know what I am being offered. .......
>
>I hope this query makes sense; my knowledge of accounting practice is
>close to zero and I have failed to find any relevant entries in the
>GnuCash Manual.
>
>All advice will be gratefully received.
>
>Felix Karpfen
>
>  
>
-- 
There is no possibility of social justice on a dead planet except the equality of the grave.