General Journal

cgw993 at aol.com cgw993 at aol.com
Wed Aug 7 22:20:28 EDT 2013


 

Thanks for sharing.   I should just use the generic term Journal instead of General Journal.  I guess I had assumed GNUcash would have used old school traditional bookkeeping practices because that is how I learned to do bookkeeping and the method I want to stick with.   I don’t want to have to create a matrix where it identifies a traditional bookkeeping term, and then if you follow the row and column, you can identify what the "equivalent" concept is in GNUcash.     I saw this a lot in proprietary software everywhere and it seems like nothing more than a way to control the users and keep them dependent on a unique way of doing something.   In the digital age, I don’t think doing something old school should have to slow a workflow.  I prefer old school, old school is good,  it has proven again and again to me at least that it is always a system you can depend on and others can understand. If everyone uses a different methodology, no one will understand each other and business will be good for proprietary software makers.    If GNUcash does not use a journal as the point of entry, I don’t want to invest the time in learning it.  For one thing, it looks like it is going to be very time consuming just to import my data because of this, which is essentially already in the form of a journal the way it is supposed to me.  All GNUcash needs to do is create or identify the account by looking at my spreadsheet, put the data in that account, then do the same for the other accounts in that transaction as indicated from my journal.  Seems simple.

 

Thank you for your thoughts though as it helped me get up to speed much faster.    If you or anyone knows of another GNU bookkeeping package where I can use a journal as the point of entry and the software uses the traditional terms and methods most people would know from basic bookkeeping.  

 

 

From: Buddha Buck [mailto:blaisepascal at gmail.com] 
Sent: Wednesday, August 07, 2013 6:15 PM
To: cgw993 at aol.com
Cc: GnuCash Users List
Subject: Re: General Journal

 

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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