End of financialyear

[Mike or Penny Novack]

>
>One of the recommendations was to use two summary equity accounts one for
>income and one for (expenses). OK if it floats your boat, but a single account will do
>as the income will be credited to the summary account and the expenses will
>be debited to the account by the closing transactions and the resulting
>balance is the profit or loss for that period. The sum of credits and debits
>gives you the total income and expenses respectively. It depends on the
>level of detail you require.
>

Historical note (and explanation of what "income" and "expense" accounts 
actually are)

In the earliest days of double entry bookkeeping (and we are talking 
about hundreds of years ago) there were no income or expense accounts. 
Transactions that were either income or expense items were immediately 
posted to equity. That allowed immediate access to "net worth" (if a 
running balance were kept) but lost information about categories of 
income and expenses. They somebody got the bright idea that instead of 
immediately posting to equity there could be temporary accounts (of 
fundamental type equity) called "income" or "expense" and the 
transactions could first be posted there. Then at the end of the 
accounting period these (temporary) accounts would be closed to equity 
by the total of each of these accounts. Well actually they were first 
closed to another temporary account (fundamental type equity) called 
"profit and loss" and the amount necessary to close this account to 
equity would be the net profit or loss for the period. That let them see 
BOTH the net gain or loss as well as the totals for each income or 
expense category.

The point is that the software can show you these totals at any time 
without actually closing the accounts.

Michael