establishing an opening balance

John R. Sowden jsowden at americansentry.net
Fri May 17 19:46:10 EDT 2013


I learned years ago to never enter an amount into the beginning balance 
field when entering an account, or starting a new 
year/database/whatever.  This has applied to many accounting programs.  
Usually you cannot edit a beginning balance.  And often, the beginning 
balances from the previous year/accounting system/manual system, etc. 
get changed because everything was not closed properly in the previous 
system.

I create a journal entry (usually about 5 due to the limitations of 
accounts that can be affected in 1 transaction of the DOS accounting 
program that I have used for years (In House Accountant).  I have a 
liability account called "Previous Balances Holding Account", where I 
put the odd amounts from an opening balance transaction.  If all is 
well, the balance in this account after all of the opening balance 
journal entries have been made is zero. All is not always well, but 
often the balance amount gives you a hint of where the issue is.  I 
didn't want to mess with the equity files (we're a corp), and this 
method has done me well over the years after some initial hair pulling.

I also like to start a new fiscal year with a new accounting database.  
I assume I can do this in gnucash by naming a new accounting file.  This 
way if I trash my accounting database, only one year was at risk.  It 
also resists the temptation of "fixing" errors in previous years after I 
have used the GL data to generate external reports for the outside world.

John

On 05/17/2013 11:53 AM, JOSEPH AIELLO wrote:
> Hi again Derek;
>   
> I tried that.
> i tried to place a value in Equity - Opening Balance but it won't open up ; before the Apply
>   
> Are you saying use Google to search for user threads;there is no user forum?
>   
> ....... joe
>
> --- On Fri, 5/17/13, Derek Atkins <warlord at MIT.EDU> wrote:
>
>
> From: Derek Atkins <warlord at MIT.EDU>
> Subject: Re: delete file names
> To: "JOSEPH AIELLO" <jraiello at verizon.net>
> Cc: gnucash-user at gnucash.org
> Date: Friday, May 17, 2013, 12:45 PM
>
>
> Hi,
>
> JOSEPH AIELLO <jraiello at verizon.net> writes:
>
>> Hi All;
>> I seem to be going backwards,I thought I had this system,but I don't.
>> I opened a new  business account and want to start with an opening balance of $2000.In the initial phase I place $2000 in the Checking Account under Assets.The  Account file shows Assets = $2000,Equity = $2000.
>> The Equity statement under Income & Expense reads as follows:
>>   
>> Capital, 01/01/2013     $0.00
>> Net income for Period $0.00
>> Investments for Period $4,000.00
>> Withdrawals for Period $2,000.00
>> Increase in capital     $2,000.00
>> Capital, 12/31/2013     $2,000.00
>>   
>> How did I get $4000? I did something wrong,but what?
>> What is the proper way to initialize an Account?
> My guess is that you assigned both the debit and credit to the same
> account instead of pulling the Opening Balance from Equity:Opening
> Balances.
>
>> ......thanks ...... joe
>>   
>> p.s. Is there a way I can search the threads for this subject matter?
> Google?
>
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
> -derek
>



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