How to close a financial year

[Mike or Penny Novack]

On 5/24/2017 10:46 AM, doncram wrote:
>   .......  What is meant by "closing" in GnuCash-jargon seems different
> than what is meant more usually in accounting.
> I............
> 4. Freezing forever the accounts for the period (in software, this would be
> done by putting a lock on any transactions before the new period)
>
> I am guessing that GnuCash does not support #4.
> I gather that in GnuCash, #2 and #3 don't need to be done, because the
> income statement report already exists.
a) The intermediate steps once used in pen and ink on paper accounting 
are indeed redundant and can be skipped

b) No, #4 is EASY. Your confusion is in forgetting that in old fashioned 
pen and ink on paper accounting this was done by putting the old journal 
and ledger volumes away when the volumes for the new period began. You 
do the SAME THING with gnucash if you wish. I suspect that the reason 
you didn't "see it" is you were expecting a "button to push"? (within 
gnucash)
    1) To make a file unalterable, you make a copy of that file onto 
read only medium.
    2) Making copies of files is something you ordinarily do outside of 
applications. How are you now making backups? This is just a special 
sort of backup (one on medium that makes it read only).

When I am doing this for one of the organizations for which I keep 
books, I do a pre-close backup (after adjusting entries like 
depreciation but before closing income and expense accounts to equity) 
and a post close backup, burn copies to CDROM (or DVDROM) and among 
other things, make sure some other officer of the organization gets 
copies. You do the "Income Statement" (well "Statement of Revenues and 
Expenses" as my organizations are non-profits) in the pre-close and the 
"Balance Sheet" either.



Michael D Novack