Public accountant question: prior year adjustments to retained earnings?

[Mike or Penny Novack]

On 3/30/2017 11:20 AM, Richard Games wrote:
> Hello, I'm a public practice accountant in Canada and unfamiliar with Gnucash. I have tried to check the archies for this topic, but the archive were unavailable on the maillist site.
Several questions -- I will answer out of order.

Is there a general journal transaction entry screen - or do all entries have to be entered directly into the register of one of the accounts?

     The journal is virtual << there is a report that will show it to you >> This is the reverse of how you would normally think of things happening << me too, as I learned bookkeeping 60 years ago >>. Instead of first entering transaction in the journal and then these being posted to the ledger, entered directly in the ledger and you can think of them as then being back entered to the journal. But as I said, that journal is virtual.

     And yes of course, you think of there needing to be a general journal which there would be in the old days when "cash book" accounting done << for a subset of the ledger, no journal entries, posted directly in this "cash book" so named because one of the ledger accounts in that subset always "cash" >>

      Enter transactions from any of the accounts affected.



Could someone please tell me how to locate retained earnings for journal entries?

     Again, "retained earnings" is virtual, a consequence of not having done a "close the books" operation, which would have reduced the net of income and expenses to zero with a net gain (or net loss) to equity.

     If you need to adjust an income or expense account in the prior year, just do that with the other side of the transaction being equity. Remember, in the earliest days of double entry, there were no income and expense accounts (temporary accounts of fundamental type equity) and the other side of these transactions was equity.

Michael D Novack