adjusting journal entries
Mike or Penny Novack
stepbystepfarm at mtdata.com
Fri Jun 7 12:11:12 EDT 2013
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).
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