Questions About Balance Sheet and Income Statement

[denbigh1974]

Mark Phillips wrote
>> Or, should I delete all the 2011 and 2012 transactions, the above
>> Adjustment to expense, and change the opening balance for the checkbook
>> to
>> be the correct value for 12/31/12?

If you entered two months of data to get an initial feel for monthly
expenses and income, I guess that the data would probably not be of much
comparative use now if it's two years old? Why not just start again from
01/01/13 while retaining your accounts structure but with everything zeroed
(and then enter the 01/01/13 opening balances from your bank statements)?

There is quite a good solution explained here:
http://www.gssezisoft.com/main/2011/08/gnucash-and-end-of-year/
<http://www.gssezisoft.com/main/2011/08/gnucash-and-end-of-year/>  


Mark Phillips wrote
> I think I figured it out. I just closed the books on 12/31/12 and put all
> the expenses and income transactions into the opening balances for the
> checkbook, and now on Jan 31 the retained earnings is equal to the profit
> for the month of January.

Looks fine. That seems to be another way of reaching the starting point
suggested above.

Personally, the retained losses/profits figure has never been useful for my
domestic finances since it is an aggregate figure from the day I first
started logging my income/expenses - quite an arbitrary date. I can see that
it might be useful if you were running a business though and wanted to
declare a dividend, say.

Disclaimer - I'm still learning about the correct procedures to use myself.
The only thing which jumped out from your posts was making adjustment
entries in your Equity accounts. My understanding is that you use this
account only for your opening balances for every bank account. Then you must
never open the Equity box again!

I haven't ever closed my books. Every transaction from day one of using
Gnucash is still visible. I just alter the Accounting Period in Preferences
if I want to analyse data from a specific period. I can see that this might
not be an acceptable way of keeping data for an external accountant though.



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