Purpose of Accounting Period? Benefit to closing books?

[Alex Aycinena]

>
>
> ---------- Forwarded message ----------
> From: Mike or Penny Novack <stepbystepfarm at dialup4less.com>
> To: gnucash-user at gnucash.org
> Cc:
> Bcc:
> Date: Thu, 22 Feb 2018 17:35:43 -0500
> Subject: Re: Purpose of Accounting Period? Benefit to closing books?
> On 2/22/2018 4:21 PM, Dan Carpenter wrote:
>
>> Adrien, general accounting principles close the books at the end of the
>> fiscal year.  This process in most accounting software updates the Equity
>> with the profit or loss balances and then zeros the income and expense
>> accounts to begin fresh for the new year.  I am just starting with testing
>> this software, but most software retains “last year data” in a separate
>> file or field within the data record for comparative reporting of this
>> month/last month ; this year/last year etc.
>>
> Gnucash (without doing  a"close the books")
> a) Have last year's data in a separate file << just make a copy of the
> file at an appropriate time >>
> b) Can still produce the reports for any prior time period << you can (if
> you lost them) recreate the previous period's reports from the CURRENT data
> file >>
> c) And you can close the books in the old pen and ink on paper way too if
> that is what you want to do. Either using the function or totally manually.
>
> This is a matter of understanding the HISTORY of bookkeeping. It was the
> PROCESS of closing the books that created the report we call "profit and
> loss" << the report WAS another temporary account used in the process of
> closing* >> And of course they needed a method of keeping the physical
> books small enough to handle << a 10,000 page book would be real awkward >>
>
> Michael
>
> * The individual income and expense accounts were not closed directly to
> equity. They were closed to this special "profit and loss" account and then
> THAT was closed to equity by the net profit or loss. BTW, this wasn't just
> back in the "dark ages". I am old enough to have learned doing it this way.
>
>

Which now-a-days was "the dark ages"! (By the way, I'm probably about your
age.)