General Journal

[cgw993 at aol.com]

Thanks for your input, I guess I don't see how the journal could be
equivilant to the ledger or why users would buy into that statement. They
are two completely different things.
-----Original Message-----
From: Michael Hendry [mailto:hendry.michael at gmail.com] 
Sent: Thursday, August 08, 2013 1:51 AM
To: cgw993 at aol.com
Cc: 'Buddha Buck'; 'GnuCash Users List'
Subject: Re: General Journal

On 8 Aug 2013, at 03:20, cgw993 at aol.com wrote:

> 
> 
> 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.


As a non-accountant, I started to use a book-keeping program in the 90s
without knowing anything about double-entry, because I'd started selling
software in a small way, and needed to keep track of invoicing, while also
managing my personal budgeting.

I learned by trial and (a lot of) error, and eventually realised that I was
going to have to learn about double-entry book-keeping. I bought an
"old-school" book, and went through all the paper exercises, until I had
sufficient knowledge and experience to stop me making (so many) errors.

If I understand it correctly, what's called the General Ledger in GnuCash
(GC)  is identical in function to the General Journal in a paper accounting
system, except that it automatically posts the transactions to the
appropriate accounts - a process you would have to do methodically by hand
in a paper system.

If you're insistent on using the General Journal method in a computerised
book-keeping system, it's supported by the General Ledger in GC. The price
you pay in doing it this way is that you have to specify at least two
accounts for the distribution each time you make an entry. I find it more
natural when entering a batch of transactions - for example from the
counterfoils in my cheque-book or from a pile of credit card receipts - is
to open the relevant source account and make the entries through that. The
end result is the same, but the risk of operator error is reduced.

Michael


> 
> 
> 
> 
> 
> 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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