"correcting" transactions

Geert Janssens janssens-geert at telenet.be
Fri Feb 21 04:36:51 EST 2014


On Thursday 20 February 2014 19:25:01 John R. Sowden wrote:
> I have been reading a lot recently about correcting, removing, etc.
> transactions.  This is typically a no no in accounting.  I am not a
> CPA, but I have a general idea of GAAP (generally accepted accounting
> practices).  It does not allow for removing or editing existing
> transactions without an audit trial.  A simple was to do these things
> is to create "reversing entries" as general journal entries with
> explanations.  If the business owner is the only person using gc, and
> the resulting reports is only for his/her use, this is more of a
> formality, but if a bookkeeper/embezzler is using gc, this allows
> transactions to be hidden/altered.  Not a good thing.
> 
> John

John,

It's probably useful to keep in context: GnuCash has two target 
audiences - home users trying to keep track of their home budgets and 
small businesses.

I don't think a home user will gain much by applying GAAP practises. 
These users don't need an audit trail, they just want to track where the 
money comes from and goes to. This target group benefits from getting a 
transaction history that matches reality as closely as possible. 
Enforcing reversing transactions and other GAAP principles here would 
only make it harder to track history because you mentally have to map 
the corrections to the mistakes to see the actual history.

For the second target group GAAP can be a useful/required tool depending 
on context and timing. GnuCash does have some useful commands for this 
(like reversing transactions) but doesn't enforce them.

And that last part is where John Ralls alluded that gnucash is not for 
businesses that require formal audit trails. He said so in his typical 
terse style but I didn't read any personal attack into it.

Geert


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