[GNC] Tutorial and Concepts

[Michael or Penny Novack]

On 11/23/2024 9:15 AM, R Losey wrote:
> I changed the subject because I want to start a discussion regarding the
> below comment, which regularly appears in this group (I am not throwing
> rocks at Stan).
>
> Sometimes, it is not a matter of understanding double-entry accounting or
> bookkeeping, but much more "how is this commonly done?". This group, at
> times, seems to throw out the "go learn double-entry bookkeeping" or "read
> the manual" just a shade too often, when some people may just want to know
> "How is -X- usually done?" (Look, I know it is tricky due to different tax
> requirements, how detail-oriented the person wants to be, and the
> flexibility of GnuCash to accomplish something in multiple ways, to name a
> few).

Gnucash is a software application that (partially) automates bookkeeping 
and provides a major shortcut for entering the "special case" of only 
two accounts involved (but a very common "special case", 90+% of all 
transactions*)

I do not see how one can use a tool that automates a process with no 
understanding of the process.

The tutorial is aimed at personal bookkeeping and sole businesses which 
is why not much about equity. If only one owner, equity is simple, not 
going to be doing much with it. Just the "net worth" on the books. But 
if a partnership or corporation, there are multiple owners, so tracking 
how much of that equity belongs to each means lots going on under 
equity. Otherwise, equity transactions will be rare (just adjustments -- 
when formal we do NOT alter prior transactions but enter a correcting 
transaction**)

The same with "close the books". Since gnucash can produce the usual 
reports without actually closing the books, few doing personal or sole 
bookkeeping will bother. But with multiple owners, probably going to so 
that the equity share of each can be adjusted <<in the general case, 
necessary -- for example, the partnership agreement might specify other 
than equal division of the change in equity>>


Michael D Novack

* Yes, in the days of pen and ink on paper we did have available this 
shortcut aka "cashbook accounting" where for a small subset of the 
ledger we entered directly into those ledger accounts (if both accounts 
in the subset). A subset because even accordion foldout our paper was 
only so wide. With gnucash, can be the entire ledger.

** Personal bookkeeping example --- we had opened the books with certain 
initial values. Let's say we had "artwork" which had been entered at 
appraised value because tracked for insurance purposes. LATER we 
discover one of those paintings a forgery. The correcting transaction 
would be a debit to equity and a credit to that painting under artwork.