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.
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