Balance sheet

[Jacco Ermers]

Ok,

Found that the solution was relatively simple. I had set up accounts for yearly numbers and since I am a one person business I pay taxes over all profit. 

So I had set up some accounts for yearly numbers when I pay out to myself, but they were labeled "bank". After labeling them as "equity" they show up as negative equity and the balance sheet matches my business account. 

Thank you all for your help

> On 3 jan. 2017, at 07:39, DaveC49 <davidcousens at bigpond.com> wrote:
> 
> seabird,
> 
> In accounting the concept of an entity is critical. It is a normal practice
> to separate as far as possible what may be regarded as the financial affairs
> of  a business and the individual financial affairs of the owners, even in
> the case of a single owner business, i.e. one would normally keep separate
> books for one's personal life and ones business. The separation is normally
> driven by taxation and business legislation and regulation which determines
> what can be regarded as legitimate transactions of the business and what are
> regarded as personal transactions.
> 
> When you own a business and take money out of it for your personal use, you
> are reducing your equity in the business and increasing your personal
> equity.
> 
> The transaction recording the withdrawal of equity of $xxxx  from the
> business in its simplest form is normally recorded in an equity account
> labelled something like Owners Drawings and the money is withdrawn from the
> businesses' bank account, i.e.
> 
> Asset:BusinessBankAccount:                                            Cr   
> $xxxx
> Equity:OwnersDrawings                      Db $xxxx
> 
> and in your personal set of books as
> 
> Asset:PersonalBankAccount                Db $xxxx
> Income:BusinessDrawings                                              Cr    
> $xxxx.
> 
> Depending upon the business structure (and local legislationn) you may be
> taxed as a business on the business income and or personally on your
> personal income, and again as many jurisdictions have rules for preventing
> double taxation, personal income which has been taxed in the hands of the
> business is often eligible for a tax credit for all (or some) of the tax
> paid by the business. 
> 
> If you maintain this separation in the business and personal books, the
> information is more readily available in the form you will need than if it
> is in a single set of books. (It is possible to do this in a single set of
> books in Gnucash but you would have to be meticulous in maintaining the
> separation by appropriate naming of accounts, as as far as I know, it is not
> possible to create top level entity placeholders in Gnucash).
> 
> Gnucash has a procedure for EoY closure of the accounts - note this is not
> the same as closing the file and reopening a new file. It is a series of
> transactions carried out at the end of the year after all other business
> transactions have been completed for that year within a file which may span
> many financial years.  The help manual
> (https://www.gnucash.org/docs/v2.6/C/gnucash-help/tool-close-book.html)
> details how to do this. This procedure does not remove any data from the
> files but effectively sets the balances in the Income and Expense accounts
> to zero at the beginning of the next financial year by transferring theand
> records the business profit/loss for the current financial year. 
> 
> Gnucash reports are generated between or at specific dates selected in the
> preferences for the current accounting period and are capable of generating
> the required information at any specified date or period. (E.g. Balance
> sheet is created as at the closing date of the current accounting period by
> default but can be at any required date by using Edit->Report Options from
> the menu with the Balance Sheet open  to set the date at which a balance is
> required and then Apply in the dialogue to regenerate the balance sheet).
> Remember to reset the dates if you require a balance at a different date
> however.
> 
> I don't understand what you mean by "when I run a balance report it still
> lists all previous years in 
> equity" as a balance sheet records the current balance at the balance date. 
> If you have closed your Income and Expense accounts to an Equity:
> Profit/Loss Summary account for each year (a common accounting practice for
> a business), then your balance sheet will show the individual year totals,
> but the top level Equity placeholder value, will be that at the balance date
> as each years profit (or loss) contributes to the equity in the business as
> do contributions paid into the business or drawings from the business.
> 
> You can also manually perform the closing of the accounts by recording the
> appropriate transactions from the ledgers for the accounts. Hope this helps
> to make it clearer.
> 
> David Cousens
> 
> 
> 
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