General Ledger Dump and Year End Closing

Mike or Penny Novack mpnovack at
Wed Oct 5 09:53:33 EDT 2016

I do not understand some of this. For example, "memberships paid prior 
to balance date were listed as Equity within the cheque account"  << 
what do you mean by "Equity WITHIN the cheque account"? ---- the 
checking account should be of type ASSET >>

But yes, when you "close the books" (IF you do a close the books, more 
on that later) all income and expense accounts get closed to Equity (and 
then they will all be zero). They are ACTUALLY temporary accounts of 
fundamental type equity in the first place. Their use allows information 
to be gathered about income and expense categories prior to their going 
against equity << how the original form of double entry worked, hundreds 
of years ago >>

If you chose not to "close the books" they the totals (the balances) of 
these income and expense accounts will include that of prior periods and 
not be useful information to you. But that will NOT affect the Income 
Statement report which will include just that from the specified time 
interval. Likewise that report will give you the net gain or loss for 
the interval << that of the Balance Sheet will be "since the last time 
you did a close the books: >>

Prepaid membership is another matter. Instead of separating it within 
the asset account, you could create a parent under Liabilities where you 
would create accounts for all member who paid in advance (that could be 
multiple years, yes?) Then each time the dues of one of those members 
became due, you would "pay" for their renewal by debiting the liability 
to them << in other words, the "income" has come from reducing the 
club's liability rather than cash coming in; the cash itself came in 
earlier >>

Michael D Novack

On 10/5/2016 1:32 AM, adamandeve club wrote:
> Hello, Michael or Penny,
> When my initial year’s reports were created I found that, for my club, memberships paid prior to balance date were listed as Equity within the cheque account (our only asset is the cheque account balance). This meant that the club’s membership income for this past year included the amount paid in prior to balance date. I have no idea how that happened! Perhaps I entered an initial balance as an asset in ‘Income Membership’? Oh, the date at which it was entered was 45 days into the then new year, but I have no record of having done so.
> Now I have changed my dates to the new financial year but I can find no way to replicate last year’s membership income paid prior to balance date. It just sits in last year’s membership income account. The opening equity of the club, being its cheque account, seems not to allow me to divide cash at bank into a membership prepaid (a different form of asset from accumulated cash) and equity carried forward. Fortunately, this is a small amount, so I will have no trouble manually adjusting the year’s income to reflect actual membership income for the year, but it would be nice to know what I did last year and whether I can do it again!
> Thanks,
> John
> John Nightingale,
> Secretary/Treasurer,
> Adam and Eve Social Club Inc
> 0408113148
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