[GNC] Account setup

[John Ralls]

No, you don't want Imbalance-USD to have a balance. That's a safety-valve account that GnuCash uses when you make an unbalanced transaction by mistake.

Opening Balances is for personal books. For a business you have two kinds of Equity: Paid in Capital, which is the money that you and any partners have invested in the business, and Retained Earnings, which is the net profit or loss from prior years. In the simplest case those will be the only two Equity accounts and should balance the difference between Assets and Liabilities.

To create an opening transaction open the retained earnings register and start a new transaction in split mode. You can use Opening Balances as the transaction description if you like. Create a split for each asset and liability account with a balance. Don't forget to carry over contra accounts (e.g. depreciation) too. GnuCash will keep a running total in the blank split. When you're done with the assets and liabilities create Equity:Paid in Capital and credit however much that was. The remaining balance should match your carried over retained earnings, so you can just assign the split to Equity:Retained Earnings and you're done.

If you're going to use GnuCash's billing and invoicing features, do *not* create splits for carried-over accounts payable and receivable in the Accounts Payable or Accounts Receivable accounts. Instead recreate the outstanding bills and invoices and close the income and expenses accounts into Retained Earnings before you start on the opening balances transaction. 

Be sure to use the Balance Sheet and Trial Balance Sheet reports to check your work before you start entering regular transactions. If you're going to be keying in 2020 and 2021 transactions refresh those reports often as you input so that you can catch mistakes when you have a small number of new transactions to hunt in. It can be really frustrating to hunt for a 0.03 error in 2 years of transactions.

Regards,
John Ralls


> On Sep 22, 2021, at 1:28 PM, Rogier F. van Vlissingen <vliscony at gmail.com> wrote:
> 
> I guess that goes to Imbalance-USD, but then how does that balance out? Or
> is it that once all the amounts are correct, it will balance and the
> imbalance must revert to zero? How does that happen if some of the opening
> balances were non-zero out of thin air?
> 
> 
> On Wed, Sep 22, 2021 at 4:21 PM Rogier F. van Vlissingen <vliscony at gmail.com>
> wrote:
> 
>> OH, thanks
>> 
>> Yeah, I already proceeded, I filled in the opening balances where I could,
>> and am now starting to create the other accounts which did not exist in the
>> standard chart of accounts, but trying to go and edit "retained earnings" I
>> do not see how I can add the opening balance.
>> 
>> it's not too many accounts in all, probably 25 total.
>> 
>> So, if I create that opening balance as a transaction e.g. for retained
>> earnings, where does the balancing transaction go? I guess I am not God's
>> greatest gift to the bookkeeping profession ;-)
>> 
>> 
>> <http://rogierfentenervanvlissingen.me?promo=email_sig&utm_source=product&utm_medium=email_sig&utm_campaign=gmail_api&utm_content=thumb>
>> Rogier Fentener van Vlissingen <http://rogierfentenervanvlissingen.me>
>> 
>> 
>> <http://rogierfentenervanvlissingen.me?promo=email_sig&utm_source=product&utm_medium=email_sig&utm_campaign=gmail_api&utm_content=thumb>
>> 
>> 
>> On Wed, Sep 22, 2021 at 4:00 PM Stephen M. Butler <
>> Stephen.M.Butler51 at gmail.com> wrote:
>> 
>>> Roger,
>>> 
>>> I found it easier to leave all the opening balances at zero while
>>> setting up the chart of accounts (COA).  Then I create one massive
>>> opening transaction dated (in your case) 12/31/2019.
>>> 
>>> That way, if I find I forgot one account, I can add it later then go
>>> back and adjust the opening transaction to include an entry for that new
>>> account (I know the purist will have nightmares and would prefer you add
>>> a new transaction).
>>> 
>>> --Steve
>>> 
>>> On 9/22/21 12:43 PM, Rogier F. van Vlissingen wrote:
>>>> I am struggling to move an existing business into gnucash.
>>>> 
>>>> Have a closing trial balance @  year end 2019
>>>> 
>>>> In the setup screen I don't necessarily have all the accounts, so I
>>> imagine
>>>> I can set them up later, but some accounts that area available do not
>>> let
>>>> me put in an opening balance.
>>>> 
>>>> E.g. "retained earnings" has a balance, but in the set up screen there
>>> is a
>>>> greyed out "zero" and I cannot set up the opening balance. Can I edit
>>> that
>>>> later?
>>>> 
>>>> I tried this before, but was never able to figure it out.
>>>> 
>>>> 
>>> --
>>> 
>>> Stephen M Butler, PMP, PSM
>>> Stephen.M.Butler51 at gmail.com
>>> kg7je at arrl.net
>>> 253-350-0166
>>> -------------------------------------------
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