General Journal

cgw993 at aol.com cgw993 at aol.com
Thu Aug 8 14:55:26 EDT 2013


I am talking about software simply following standard bookkeeping practice.
The journal is the entry to the bookkeeping system, not the ledgers and
there are major implications for not following that methodology. You
sacrifice all the built in structure of the journal.   Yes, I understand
that there are workarounds.   

What is the motivation for quickbooks or Peachtree for doing it this way?
Well users trained on those methods cannot easily move on to another
software package and are tied to the software. Why is GC also doing it this
way?  I imagine because they had no choice in order to pull users away from
non free software.  How are proprietary software makers responding to more
users using free software, which is a huge threat to their business? By
forcing the use the wonderful "feature" of "Cloud" computing, which
nullifies the GPL licenses which protect you. Cloud computing is your worst
enemy.

 Just because GC creates a journal after you have entered the data into the
ledgers directly, does not mean the journal has served its purpose.   You
always enter the data into the Journal first, otherwise it doesn't serve any
real function.

A journal contains at least 2 accounts.  You have to enter the other account
anyway when you download statements.   This can be done manually, or tools
can be used to make this semi automatic.   GC has no real way of creating
journals for you which is what they they seem to attempt to do  when they do
auto this or that.   

Assuming all statements from banks, credit cards, other financial use their
own format, you the user then have to standardize the format.   This is
relatively easy using good old debits and credits and understanding the
accounting equation. 

For example, download the CSV from your bank.  GC should ask for the
appropriate fields, and you tell it.   GC sort does this, but does not use
Debits and Credits, no they  use deposits and withdrawals which is not the
correct terminiology and will cause confusion among the users.  How do you
apply this to a credit card download? You have a 50% chance of getting it
right or you have to figure out what they mean..is deposit a debit or credit
when it comes to credit cards is the very first question I will bet 99% of
users ask themselves.  Problem solved if they just use Debits and Credits as
the fields.

Once that is done, GC has about half of a journal.  You the user then enter
the other account or accounts that the transaction applies to.  You can do
this manually, or you can use tools that GC could have easily provided to
assign every transaction that includes the string term "grocery" to the
grocery expense account, making the process semi automatic.  This technique
might not work if the string grocery was found, but it was a refund, but I
just used that as an example to illustrate the user has to make these
decisions and can go so with the right tools to make it efficient.    Making
it fully automatic is not possible because in order to do so, GC would have
to read your mind. 

 When done, you now have a journal.   There is no real decision making for
GC to do, all it has to do now is post the transactions to the ledgers as
entered in the journal. This is all that I wanted to use GC for, but I have
to do a lot of work arounds to accomplish this goal.


-----Original Message-----
From: gnucash-user-bounces+cgw993=aol.com at gnucash.org
[mailto:gnucash-user-bounces+cgw993=aol.com at gnucash.org] On Behalf Of Ian
Konen
Sent: Thursday, August 08, 2013 11:15 AM
To: GnuCash Users List
Subject: Re: General Journal

On Thu, Aug 8, 2013 at 11:52 AM, <cgw993 at aol.com> wrote:

>
>
> There is no possible way to get away from the fact that for each 
> download, no matter what the account, the user user needs to assign 
> the affected
> account(s) in the transaction.  If you download a bank statement, and 
> it shows on the checking account there was paid an amount of $73 to 
> Grocery Store A, of course the bank statement is not going to provide 
> the other accounts affected by that transaction.
>

Are you still talking about importing CSV data or are you talking about
entering transactions as they come up?  Because if you understand that
GnuCash is not expecting to find a list of other accounts in an imported CSV
file, then why would expect it to be able to figure out your CSV
representation of a journal with separate lines for each credit and debit?
 You understand that in the most general sense, CSV just means comma
separated values: Data that is logically sorted into columns, stored as
ASCII and separated by commas.  That GnuCash is looking for a more specific
format is because the CSV import was implemented for a specific use case:
Bank downloads.  You were not around when the feature was implemented to
tell them about your specific spreadsheet format so the ability to import
your format wasn't included. If you're moving your data from a spreadsheet
to somebody else's specialty software (accounting or otherwise), it is your
job to convert your data to a form the target software can parse.  It's not
a moral imperative; it's just not reasonable to expect the developer to
anticipate every other possible data format and write a generic interpreter.

[snip..discussion about loading bank data I don't disagree with]

the general journal. "  Some additional logic can be used.  Trying to do
> this logic for the user means the user will never understand their own
> bookkeeping system.   They may be able to do  taxes, ,maybe, but never
will
> be able to see situation is with the money at any given moment.
>

Still not sure what the complaint is: In the previous post you seemed
annoyed that GnuCash wouldn't create new accounts based on what it finds in
the CSV file.  That is because GnuCash does not expect to find account names
in the file...it expects to find a Bank's summary of information about each
transaction, including the counter-party.  Now you seem to object to GnuCash
making any attempt to parse a recorded transaction and associate it with
appropriate accounts.  Do you really think the 15th time I debit
Expense:Groceries when I see "Piggly Wiggly" I'm still solidifying my grasp
of accounting concepts?  It's a time saving device, not an educational tool.
I also completely disagree with the idea that doing things efficiently will
cripple the users' ability to learn the basics.
 That's a pretty low opinion of the user base.  Certainly some will decide
they don't care to learn the basics and if they can keep their books
balanced in GnuCash without doing so, more power to 'em.  Those who do
bother to learn about bookkeeping are not going to have a hard time
understanding what the import is trying to do in terms of selecting accounts
for transactions.


>
> Stating that the journal is equivalent to the ledger makes no sense. 
> This is
>

I didn't state that.  You seem stuck on the idea that the only way a
transaction should be entered is by typing in cells of an interface
formatted like a proper journal because any other method will screw up the
books.  That is false.  Entering in a journal first is an important step in
a pen and paper system because there is so much manual copying of entries
that duplication and omissions are easy mistakes to make.  GnuCash CANNOT
put transaction information in one place and leave it missing anywhere
else: it's only stored in one memory location internally, and only saved in
one entry in the file.  This may also be different from a spreadsheet system
where the use of a formula only allows automated data flow in one direction.


> how the quickbooks and peachtree message boards sound.    This really
means
> that and on the 2nd Tuesday of every 3rd moon you do this to achieve that.
> They cannot possibly be equivalent.  What GC has done is to create a 
> clone of some proprietary software that also did it wrong on purpose.


This is what's bugging me, and I suspect everybody else who's taken the bait
here:  There are plenty of fair criticisms to level..GnuCash is a work in
progress, and in particular the documentation needs work.  Perhaps figuring
out how to use the GnuCash interface to perform a standard accounting action
is harder than it should be, but you sound like you think there's some grand
conspiracy to prevent accounting software from using proper accounting
procedures.  It's a very ungenerous attitude towards any software, but
especially freeware, which doesn't benefit from user lock-in.



>
> -----Original Message-----
> From: gnucash-user-bounces+cgw993=aol.com at gnucash.org
> [mailto:gnucash-user-bounces+cgw993=aol.com at gnucash.org] On Behalf Of 
> Ian Konen
> Sent: Thursday, August 08, 2013 6:48 AM
> To: GnuCash Users List
> Subject: Re: General Journal
>
> On Wed, Aug 7, 2013 at 10:20 PM, <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
>
>
> You're obviously entitled to your opinion, but this seems a little picky.
>  It's a computer program...there are options in a computerized system 
> (like multiple ways of entering transactions that all put the same 
> data into the system, and the ability to re-sort transactions by date 
> if they're entered out of order) that are not really an option in a 
> pen and paper system, and it is silly (my opinion of course) to expect 
> developers to forgo the advantages of a computerized system to conform 
> to an order of operations designed for pen and paper.  They're not 
> trying to trap you into their platform by inventing idiosyncratic 
> accounting methods nobody has ever heard of.  Perhaps a little more 
> care to use the words journal and ledger properly would help, but for 
> the most part the concepts of double entry book keeping have been 
> implemented correctly.  So what if you're looking at a ledger instead 
> of a journal when you want to enter a transaction?  The fundamental 
> data are the transactions themselves...and yes, even if entered from 
> an account register, transactions involve at least two accounts, and 
> don't unbalance the books (if you choose not to enter the second 
> account then GnuCash creates and fills an account called "Imbalance", 
> but that's your choice.  The entry point for the second account is there
and easy to see).
> That GnuCash assumes one of the accounts will be the one who's 
> register is being edited saves typing / mouse clicks, and can be 
> overridden if that is not desired behavior.
>
> I'm not a developer, and I've never seen this stated explicitly, but I 
> think the basic design idea is that the account registers (and the 
> general
> ledger/journal) are meant to offer convenient data entry and user info 
> and may allow you to do or see things that would not normally be 
> present in a pen and paper system.  If you need to meet a strict 
> formatting requirement, that's what reports are better for, and I 
> think it's a little more reasonable to expect standard reports like 
> "balance sheet" to conform to a standard format your accountant might 
> be expecting.  Then you print the report and send it along, but the 
> underlying data is not edited in that process.
>
>
> > 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.
> >
>
> The CSV import option is an attempt to match the output format of 
> online banking data.  It's not a simple problem because there is not a 
> single agreed upon format, so some user input is required to help 
> parse the columns and date formats etc, but one thing I'm pretty sure 
> almost every bank does is format the data like a ledger: info only 
> relevant to one bank account at a time.  GnuCash's CSV import is not 
> designed to import journal data because your bank won't give you a CSV 
> account summary formatted like a journal.
> GnuCash does give the option to select the opposing account during 
> import and makes an attempt to learn to map the transaction data to 
> your accounts list, but that's an extremely difficult problem when the 
> available information is usually just a store name and maybe an address.
>  If you can convert your spreadsheet (manually or through spreadsheet 
> logic (perhaps a lookup function) from journal form to ledger form, 
> and you include the opposing accounts, I'm pretty sure the training 
> algorithm will learn it very quickly, but if you were only going to do 
> it once to convert from spreadsheet to GnuCash and then never again, 
> it's probably easier to just input the data the old school way: eyeballs
and fingertips.
>
>
> >
> > 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.
> >
>
> I would check Sourceforge for other open source accounting software if 
> you haven't already, but beyond that I cannot help.
>
>
> >
> >
> >
> >
> >
> > 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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> > gnucash-user at gnucash.org
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> >
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>
>
>
> --
> Ian Konen
> iankonen at gmail.com
> www.linkedin.com/in/iankonen
> 978-821-6498
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>


--
Ian Konen
iankonen at gmail.com
www.linkedin.com/in/iankonen
978-821-6498
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