General Journal

[Buddha Buck]

Books on basic bookkeeping also discuss "T-Accounts" too, but no one
actually keeps books that way.  There are a lot of things taught in basic
books which are useful and important for understanding the basic concepts
than are actually used.

The idea of the General Journal being the initial entry-point of all
transactions is one of these things.  Even in traditional, manual
double-entry bookkeeping the General Journal was just one of many journals
typically used, in addition to sales journals, cash journals, etc.  Many
actual journals have an implicit assumption that one account will always be
involved in the transaction, and provide places to record the other
account(s) involved (for instance, a "sales journal" might have columns for
sale amount, sales tax, cash, check, credit, so that when the journal is
transferred to the ledgers, the sales column corresponds to the appropriate
income account, the sales tax column corresponds to the appropriate
liability account, the other columns correspond to their respective asset
accounts, etc).  In this setting, the "General Journal" proper is used only
for transactions that can't easily be recorded in more specialized journals.

That said, every DE-accounting package that I have been able to examine (or
write) has, at it's core, the functional equivalent of a General Journal,
in the form of a date-stamped collection of transactions, each of which
must balance debits and credits.  Very few DE-accounting packages use the
General Journal as a main data-entry method.  Why? Because it's
inconvenient, and not how most people think.  Most people think in terms of
specific workflows that look at one main account at a time -- like the
non-general journals mentioned above.  The account registers in GnuCash act
like specialized journals, one for each account.  You see a time-ordered
list of transactions (journal entries) that involve that account.

Note that this is different than what you see in a standard T-account
ledger.  Usually, you don't see the rest of the transaction involved in a
ledger-entry; you just see it's effect in the one ledger (ideally, there'd
be an identifier to be able to look up the rest of the transaction in the
journals, for auditing and error-correcting purposes).  In the GnuCash
registers/journals, you see the other account(s) involved in the
transaction as well.

That said, under Tools->General Ledger, GnuCash provides a General
Journal-style display and entry.  Every entry is displayed like a "split
transaction", even if only two accounts are involved.  Furthermore,
whenever you use the "split" button you effectively get a portion of the
General Journal exposed in the current register (you can use a split entry
to put stuff into any set of accounts, even excluding the account who's
register you are currently using).



On Wed, Aug 7, 2013 at 7:22 PM, <cgw993 at aol.com> wrote:

>
>
> Hi,
>
> I am new to GNU software in general and am a big supporter of the FSF
> ideas.
> Gnucash looks like it will be very useful.   I have also recently decided
> to
> learn the basics of bookkeeping as is taught in a textbook or by a teacher
> instead of as is taught by quickbooks or some other proprietary software.
>
>
>
>
>
> Most people I would guess do not have a basic understanding of bookkeeping
> principals or the accounting equation.   This is just my opinion but I
> believe that you cannot keep books unless you have this basic
> understanding.
> The software makers, to some extent this includes Gnucash, seem to try to
> bypass bookkeeping fundamentals and to create their own system in order to
> "simplify" the process for people that are not familiar with the basics of
> bookkeeping.   I strongly believe this is not a good practice and that this
> will cause more failures than successes in helping people to keep their own
> books.  But I could be wrong, I did just after all learn some basic things
> about bookkeeping recently.
>
>
>
>
>
> The very first thing that I was taught to do, and what I assume is taught
> by
> most textbooks, is to become familiar with the concept of the General
> Journal.    This is probably the most critical step in the entire
> bookkeeping process.   It is during this step that the nature of the
> transaction and the amounts involved first enter the bookkeeping system.
> It is also at this step that the user can easily verify that the
> transaction
> is balanced.     In order to become familiar with how to use the general
> journal, one has to practice with transaction analysis problems.   An
> example transaction analysis problem -
>
>
>
> You buy $73 of groceries with your checking account -
>
>
>
> Debit Account - Expense Groceries $73
>
> Credit Account - Checking $73
>
>
>
> What happens if instead you use a credit card to make the purchase?  What
> about if you used cash, spent $80, paid $73 for groceries and tipped $7 to
> the person who helped carry the bags to the car?  Understanding how to
> enter
> this into the general journal is critical and in fact all over steps pretty
> much take care of themselves after this point.
>
>
>
> Why in the world accounting software would want to bypass the General
> Journal in some way.   Almost all software seems to intentionally do this.
> The General Journal is the most important part of the bookkeeping process.
> Why would you want to skip this step and go right to the General Ledger?
> This is not how students are taught bookkeeping.  Going straight to the
> general ledger seems like a guarantee that the books will never be balanced
> and that the user will never really understand what money is going where
> and
> how and why.
>
>
>
> Many people that switch to Gnucash have existing data they would like to
> set
> up.  This can involve dozens of accounts and thousands of transactions.
> For example I use excel and would like to instead use Gnucash.    I can
> save
> the spreadsheet as a .csv file, but the problem with Gnucash is that I
> guess
> I can only import one account at a time?   Why not let me specify right in
> the spreadsheet the name of the account that transaction goes into?
>
>
>
> If Gnucash used a general journal as the point of entry into the sytem, it
> seems like it would be easier for people to import their data.   Is there a
> way around the problem of importing one account at a time?
>
> Thank You
>
>
>
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