Balance Sheets

Sun Jan 5 04:54:39 EST 2014

Hi Chris,

What Close Books does is actually exactly what John described. It will 
add two new transactions that 'zero' all the expense and income accounts 
and add them to a (user definable) account under Equity. The zero-ing is 
simply achieved by adding an amount to each expense that is equal to the 
total balance of that account on the configured date, only with the 
opposite sign.

The main thing to keep in mind after doing this is that changing any 
transactions in the period before the Close Book function was applied 
will invalidate the starting balance. While it is easy to revert this 
(remove the 2 transactions for Income and Expense generated by Close 
Book), it may produce unexpected (and incorrect) results. So you should 
only apply the Close Book function if you're reasonably certain that the 
period has indeed been fully entered.

As for your other question: I don't know what Equile means in the 
alternative balance sheet, sorry.

Bye,

Egbert

op 05/01/14 10:45, Chris Bester schreef:
> Thank You Egbert
> I am slightly hesitant to use(Close Books), what actually happens when you
> do (Close Books)?
> My other question was; just for interest sake, what does (Equile) mean in (
> Balance Sheet( Equile)?
> Thanks again
> Chris
>
>
> -----Original Message-----
> From: gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org
> [mailto:gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org] On
> Behalf Of Egbert van der Wal
> Sent: 05 January 2014 11:21 AM
> To: gnucash-user at gnucash.org
> Subject: Re: Balance Sheets
>
> If the situation is easier, the steps are also easier.
> The first three steps can be replaced by the 'Tools' -> 'Close Book' option.
>
> The rest of the description is only needed when you have liabilities or
> fixed assets that need depreciation. If you don't, you can skip this.
>
> So, in your case, only 1 step remains (Close Book), not that hard, right?
>
> Bye,
>
> Egbert
>
>
>
> op 05/01/14 08:47, Chris Bester schreef:
>> Hi John
>>
>> Your suggestions are appreciated.  Thank you for a very comprehensive
> reply.
>> However, rather complicated.  We only have one form of income "Members
>> Fees",  we have no liabilities, our only asset is money in the bank,
>> no depreciation and a limited range of expenses.  Therefore, I think
>> it would be much easier to create a spreadsheet and manually enter
>> information from my "Income Statement" on a monthly basis.  On such a
>> spreadsheet I can enter opening balances manually.  Entering the
>> necessary formulae will do the calculations as I go along.
>> Thanks in any case, I will put your suggestions on file as I am sure
>> they will come in handy in future.  By the way, can somebody explain
>> to me what the word "Equile" mean in "Balance Sheet (Equile )"?
>>
>> Chris
>>
>>    
>>
>> -----Original Message-----
>> From: gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org
>> [mailto:gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org]
>> On Behalf Of John R. Sowden
>> Sent: 05 January 2014 01:39 AM
>> To: gnucash-user at gnucash.org
>> Subject: Re: Balance Sheets
>>
>> On 01/04/2014 01:00 AM, Chris Bester wrote:
>>> Hi There
>>>
>>>     
>>>
>>> Re:  My problem with Balance Sheets.
>>>
>>>     
>>>
>>> In order to solve my problem regarding opening and closing balances,
>>> Maf and Derek suggested that I create two Balance Sheets, side by
>>> side in the multicolumn report and Tweak or Message them. I have
>>> entered two Balance Sheet (Equile) next to each other, because I find
>>> this Sheet a better way of communicating my organisation's  financial
>>> situation
>> to my committee.
>>> Question; what do I do now, these two sheets are exactly the same,
>>> how do I Message or Tweak the new financial year's Sheet to start all
>>> my accounts from zero and my asset accounts with last year's ending
>>> balances and not the same balance the previous year started with?
>>>
>>> Thanks for your help.
>>>
>>> Chris
>> The are several steps that you need to take to start the new year.
>> These are General Journal entries, meaning not from the checking account.
>>
>> Move all of the income to an "Income Summary" account.
>>      Debit the income from each income account for the "old year".
>>      Credit Income Summary for each of the amounts.
>>
>> Next Move all of the expense account amounts from the expense accounts
>> to the "Income Summary" Account.
>>      Debit the Income Summary account for each below amount.
>>      Credit each expense account for its total.
>>
>> Move the difference between the two, hopefully a credit amount
>> (profit) to the equity account.
>>      Debit the Income Summary Account for its balance.
>>      Credit the Retained Earnings account, if a corp.
>>
>> Next you need to deal with the assets and liabilities.
>>
>> Hopefully during the year, as you paid off loans, etc., you debited
>> the interest to the Interest Expense account and debited the balance
>> of the payment to the Liability "Truck Loan" (or whatever) account,
>> thereby lowering the amount of the Liability.
>>
>> Additionally, at the end of each "accounting period", that is, when
>> you choose to present the financial state of you organization to
>> yourself for posterity, or to others, such as quarterly, you should be
>> posting Depreciation, that is, reducing the value of any fixed assets
>> as they are consumed, down to the Salvage Value.  You depreciate the
> "Salvage Value"
>> when you dispose of the asset.
>>
>>      Credit the depreciation account for the depreciation amount from
>> your Depreciation Schedule for this asset.
>>      Debit the Accumulated Depreciation account by the same amount.
>>
>> Subtract the Accumulated Depreciation from the asset account.  That is
>> the ending balance of the asset.
>>
>> You now would have the information needed to create the closing
>> balances of the 'old year', which is the same as the beginning
>> balances of the 'new year.
>>
>> Hope this helps
>>
>> John
>>
>>
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