Housekeeping v archiving

[Mike or Penny Novack]

> Hello .....
>
> It may be different for other users but my main issues is the number of
> redundant accounts including expense and income.
>
> For example house construction project which needed budgeting, a complete
> one off but lots of accounts and sub accounts generated. Would it be good
> housekeeping practice to leave the transactions but move the expenses into
> one obsolete account.
>
> When using the report function unless using the default settings it can be
> difficult to select individual accounts or eliminate others, this as
> mentioned being the main problem.
>
> The main bank or credit accounts are still functional with up to date
> balances, this option would leave entries as is but move multiple expense
> accounts into 'archive account' (or category if you use Quicken :)
David, before advising you HOW to do this using gnucash need to settle 
WHAT in the bookkeeping sense.

For example, in the situation you describe, I would have expected that 
as of the end of the project (completion, certificate of occupancy from 
the building inspector), all the expenses of the house construction 
would have been "closed" to the initial balance of the (new) asset 
"house". That's because at this point its "book value" is the cost of 
acquisition (the cost of building it). That would mean that the 
remaining balance of those expense accounts would be zero. I also assume 
that they would have been grouped under a parent account "house 
construction expenses".

a) In the display of accounts, you don't see the individual house 
construction accounts unless you have "house construction expenses" 
expanded.
b) Won't show up in the reports unless you are specifying that you want 
to see accounts even if zero balances.

When we say that you don't have to run "close the books" (close income 
and expense accounts to equity) this is very different. Those "expenses" 
were (presumably) the cost of acquiring the house. In other words, if 
you had BOUGHT the house, the transaction would have been a simple 
"asset transfer" (not an expense, trade of one type of asset for another 
or for a liability if a mortgage). Here, temporarily, you had the 
outgoing of cash as expenses (no house as asset yet, partially completed 
not worth much if anything). But after completion, you get an asset on 
the books (house) not by paying money for it but by cancelling out those 
expenses.

If you were planning to get this new house on the books some other way, 
what had you been planning to do?

Michael D Novack

PS: Folks, things like this are really "fundamentals of bookkeeping" 
questions.