new year

[Katie Eldridge]

On 09/11/15 20:35, Wm... wrote:
> Mon, 9 Nov 2015 09:46:59 <56406B93.5030808 at yahoo.co.uk>
> Katie Eldridge <eldridgetideswell-katie at yahoo.co.uk> wrote...
>
>> Gary,
>> Michael referred to Gnucash having a method to do this, but didn't 
>> explain how...
>> If you go to 'tools' -> 'close book', this will move the 'retained 
>> earnings' balance to the equity account you specify and zero out all 
>> the income and expense accounts, so whilst you will still have the 
>> same file (and therefore keep all your client and vendor details 
>> etc), all the totals on your accounts page will be for the current year.
>> Whilst I can follow the logic for not doing this, I also couldn't see 
>> how I could easily keep track of our taxed profits (ie the amount 
>> which we'd paid corporation tax on already) without moving the year's 
>> profits to an account from which I could then take the tax...
>> hope that helps,
>> Katie
>
> Are you closing the books because you can't get the numbers you need 
> otherwise?
>
> I did a spreadsheet about this for a Charity recently because the 
> Trustees wanted to know what the Balance Sheet numbers other than 
> Assets, Liabilities and Equity meant to them (answer "not a lot").
>
> If I'm on the right track maybe I should do a quick write up on the 
> relationships between the numbers on the
>
> Equity Statement
> P&L / Income Statement
> Balance Sheets (both flavours)
>
> The thing most people seemed to get stuck with is that if the books 
> aren't closed the Retained Earnings on the Balance Sheets goes up and 
> down in mysterious ways. Once joined up to the other main docs all 
> became clear.
>
> Also there is nothing stopping someone from closing the books for 
> *reporting* purposes (mainly to produce familiar looking Balance 
> Sheets) and then deleting the closing transactions and getting on with 
> business.
>
Wm,
I'm fairly sure I can't get the numbers I need without closing the 
books...  It's not for reporting purposes - I can do all the balance 
sheets, income&expenditure and equity statements no problem using the 
reports, as you can change the accounting period for that.  Its keeping 
track for dividends purposes...  The dividends come out of profit after 
making allowances for tax liabilities.  The previous year's profit has 
had tax taken out already, so that is an amount that can be used as 
dividends when current assets allow, whereas the current year's profits 
I need to ensure that the dividend amount makes allowance for the tax 
liability on those profits.  Also, I needed to close out the 
income/expense amounts into an equity account in order to take the 
corporation tax liability out of it, as it's not an 'expense'.
Does that make sense, or am I completely misunderstanding?
Katie