Am I missing something?

[Derek Atkins]

Hi,

On Sun, May 23, 2010 9:14 pm, Alex Hill wrote:
> Thanks for the replies. How would I go about transferring the amount
> across at the end of the period? Would I just zero off the income/expense
> account and increase/decrease retained earnings appropriately (then from
> retained earnings to owners drawings if required)?

If you really really REALLY want to, then yes.  You could even use the
Tools -> Close Books functionality to do it for you.  But keep in mind you
cannot run reports across a book closing transaction, so you'd lose the
ability to e.g. run a multi-year report.  YMMV.

-derek

>   ----- Original Message -----
>   From: Pablo Francesca
>   To: Alex Hill
>   Cc: gnucash-user at gnucash.org
>   Sent: Monday, May 24, 2010 12:15 AM
>   Subject: Re: Am I missing something?
>
>
>         Equity is realized over a defined period of time. When you close
> your books for the month/quarter/year, that is when you will
> realize profits and affect the equity account.
>         If your anxious to see how you stand profit-wise, just run an
> income report.  The net income is the amount your equity will
> change at then end of the accounting period.
>
>         Think of a change in equity as the time when you actually claim
> your profits.  Or think of a change in equity as the time you
> actually realize profits.  One might say that it is arbitrary that
> at the end of one period you can claim a profit and the next day
> you cant, but that is the nature of accounting.
>
>         Of course, I'm not an accountant so there might be a better
> explanation.
>
>         --- On Sun, 5/23/10, Alex Hill <alex_hill at arach.net.au> wrote:
>
>
>           From: Alex Hill <alex_hill at arach.net.au>
>           Subject: Am I missing something?
>           To: gnucash-user at gnucash.org
>           Date: Sunday, May 23, 2010, 8:06 AM
>
>
>           I am a little confused about the relevance of the accounting
> equation:
>
>           Assets = Liabilities + Owners Equity
>
>           When I make up an invoice (service) I increase cash and sales
> accounts, but there is no change in the equity accounts. Am I
> missing a step? Should I somehow be increasing my owners equity
> / retained earnings etc when invoices are paid off?
>
>
>
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