adjusting journal entries

[Mike or Penny Novack]

The reason I gave the answer that I did .........

>>
> I am learning the gc way of things, which is a little cryptic, but 
> this is straight forward.  Assuming you are using accrual accounting 
> as opposed to cash accounting.  You use the Tools>general ledger 
> entry.  This is actually a "general Journal".  There is no 'source 
> account', like writing a check.

Yes, the tool allows you to enter transactions into the journal (and 
have gnucash post them to the affected ledger accounts)

But the reason I said "no different from any other transaction" is that 
you could instead enter from one of the affected ledger accounts just 
like with any other transaction (and gnucash creates the implied journal 
entry like always).

I simply don't know what you mean by "source". The gnucash set of books 
is an ordinary set of books. This is NOT "cashbook accounting" where 
cash HAS to be one side of any transaction (most of them) and you use 
the journal just for the few transactions where "cash" isn't one side of 
the transaction. You might simply have been thinking of gnucash that way 
(as a "cashbook" set of accounts) because it is autoposting* and 
"cashbook" accounting used to be done in the old pen and ink on paper 
days in situations where 90% of transactions affected cash and a small 
set of income and expense accounts -- few enough so this part of the 
ledger could fit on say 12 column accounting paper and THESE 
transactions didn't need to get posted, prone to errors (most errors 
were miscopying or transposing digits). Twelve columns would allow for 
"cash" and five other accounts.

If you don't understand, consider how you would properly enter:

a) A purchase made by a credit card.
b) A purchase made "on account" (terms might be 30 days net, 1% per 
month thereafter ---- you might be sent this invoice later but generally 
would come dated as of the date of the purchase).
c) A purchase from your brother; you now owe him that amount.


> You enter the debit and credit. So, let's say, at the beginning of the 
> year, you bought a huge chunk of chocolate, using the following entry:
>
> DR  Asset Chocolate Chunk     1,000.00
> CR Cash-Checking Account                         1,000.00
>
> During this reporting period, the current quarter, you consumed some 
> of the chocolate chunk.  The adjusting entry, made before creating the 
> quarterly balance sheet would be:
>
> DR  Chocolate Expense                30.00
> CR  Asset Chocolate Chunk                             30.00
>
I other words, to enter this transaction I would open EITHER Chocolate 
Expense or Asset Chocolate Chunk and the only thing I would need to take 
care about is that gnucash tends to use labels other than debit and 
credit so you should be aware on what side of the ledger these ledger 
accounts live (whether they normally have a debit or a credit balance).

Michael