Question regarding documenting Reversing Transactions

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Question regarding documenting Reversing Transactions

GnuCash - User mailing list
Hello,

Recently, a question about Reversing Transactions was raised on the list, and a discussion about how and what GnuCash implemented this arose. In the process of testing out this feature (which I’ve never used), I noticed that the function creates an identical new transaction on the current date, but with the numbers on splits reversed.

I found this to be a little confusing, as it was very difficult to tell after the fact in the books what had happened, since both transactions had exactly the same descriptions. I was wondering whether in “Old Style” accounting, accountants made any kind of annotation on the reversing transaction to indicate that the second transaction reversed the first. For example, if the first transaction was  “Pay George for work done,” would the reversing transaction say something like “Pay George for work done (REVERSE)” or something?

If so, then I might submit a bug to have this added to the reversing transaction feature, but if not, then I would let it drop.

TIA,
David
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RE: Question regarding documenting Reversing Transactions

David Carlson-4

   
David T,
My personal preference would be to   replace the line under the description with a comment similar to "Reverses transaction dated mm/dd/yyyy"
David C


Sent via the Samsung Galaxy S® 5 ACTIVE™, an AT&T 4G LTE smartphone

-------- Original message --------
From: "David T. via gnucash-user" <[hidden email]>
Date: 4/25/17  8:34 AM  (GMT-06:00)
To: Gnucash <[hidden email]>
Subject: Question regarding documenting Reversing Transactions

Hello,

Recently, a question about Reversing Transactions was raised on the list, and a discussion about how and what GnuCash implemented this arose. In the process of testing out this feature (which I’ve never used), I noticed that the function creates an identical new transaction on the current date, but with the numbers on splits reversed.

I found this to be a little confusing, as it was very difficult to tell after the fact in the books what had happened, since both transactions had exactly the same descriptions. I was wondering whether in “Old Style” accounting, accountants made any kind of annotation on the reversing transaction to indicate that the second transaction reversed the first. For example, if the first transaction was  “Pay George for work done,” would the reversing transaction say something like “Pay George for work done (REVERSE)” or something?

If so, then I might submit a bug to have this added to the reversing transaction feature, but if not, then I would let it drop.

TIA,
David
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RE: Question regarding documenting Reversing Transactions

Edward Doolittle
I agree, though the date format should depend on the date format setting or the OS preference for date formats.

I was going to say that the additional text (“Reverses ... dated ...”) could be added by the user if they wanted, but that argument is reversible (the user can delete the additional text), and it may be difficult to type in the date accurately if it has scrolled off the screen, for example.

Sent from Mail for Windows 10

From: david.carlson.417
Sent: April 25, 2017 12:21 PM
To: David T.; Gnucash
Subject: RE: Question regarding documenting Reversing Transactions


   
David T,
My personal preference would be to   replace the line under the description with a comment similar to "Reverses transaction dated mm/dd/yyyy"
David C


Sent via the Samsung Galaxy S® 5 ACTIVE™, an AT&T 4G LTE smartphone

-------- Original message --------
From: "David T. via gnucash-user" <[hidden email]>
Date: 4/25/17  8:34 AM  (GMT-06:00)
To: Gnucash <[hidden email]>
Subject: Question regarding documenting Reversing Transactions

Hello,

Recently, a question about Reversing Transactions was raised on the list, and a discussion about how and what GnuCash implemented this arose. In the process of testing out this feature (which I’ve never used), I noticed that the function creates an identical new transaction on the current date, but with the numbers on splits reversed.

I found this to be a little confusing, as it was very difficult to tell after the fact in the books what had happened, since both transactions had exactly the same descriptions. I was wondering whether in “Old Style” accounting, accountants made any kind of annotation on the reversing transaction to indicate that the second transaction reversed the first. For example, if the first transaction was  “Pay George for work done,” would the reversing transaction say something like “Pay George for work done (REVERSE)” or something?

If so, then I might submit a bug to have this added to the reversing transaction feature, but if not, then I would let it drop.

TIA,
David
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Re: Question regarding documenting Reversing Transactions

Mike or Penny Novack-3
In reply to this post by David Carlson-4
On 4/25/2017 2:21 PM, david.carlson.417 wrote:
>      
> David T,
> My personal preference would be to   replace the line under the description with a comment similar to "Reverses transaction dated mm/dd/yyyy"
> David C
>
And here is where I would express a strong preference for "free form"
because SIMPLY reversing a transaction is not the only sort of
"reversing" transaction. I might be wanting to say things like
"correcting the amount" or "posting to correct account", etc.


Michael D Novack
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Re: Question regarding documenting Reversing Transactions

DaveC49
I wish to support Mike's position. There should be no need for a reversing procedure to be implemented in any formal way. If you are making a reversing transaction, then you need to notate it so that it is clear which transaction it is reversing and why. The second point about other adjustments is equally valid. You may have to make end of period adjustments if you are using accrual accounting or to correct items (rounding errors) etc.  Reversals are rarely a routine transaction.
 
It is possibly better to explain reversing/correcting a transaction and adjustments with an example(s) in the Tutorial and Concepts guide rather than having a specific feature for it.
David Cousens
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Re: Question regarding documenting Reversing Transactions

GnuCash - User mailing list
Dave C., the option already exists (under the Transactions menu), so the questions here are: should it be changed, and how should it be documented?

My original question on this thread had to do with whether “old style” accounting included annotations with the reversing transaction, and I believe that the answer is probably “yes.” With the currently-implemented feature, I think it problematic that the reversing transaction is created without clear feedback, and without an option to add annotations to the new transaction. The user selects Add Reversing Transaction, and is immediately returned to the register with no further feedback. The feature as implemented requires the user to locate the newly-created reversing transaction and edit it to add annotations, and I believe it could be set up to allow a user to add an annotation before creating the new transaction.

FWIW, I have already added a bug for documenting the feature (Bug 781714), and one for creating an entry in the glossary (Bug 781711).

David T.

> On Apr 26, 2017, at 6:52 AM, DaveC49 <[hidden email]> wrote:
>
> I wish to support Mike's position. There should be no need for a reversing
> procedure to be implemented in any formal way. If you are making a reversing
> transaction, then you need to notate it so that it is clear which
> transaction it is reversing and why. The second point about other
> adjustments is equally valid. You may have to make end of period adjustments
> if you are using accrual accounting or to correct items (rounding errors)
> etc.  Reversals are rarely a routine transaction.
>
> It is possibly better to explain reversing/correcting a transaction and
> adjustments with an example(s) in the Tutorial and Concepts guide rather
> than having a specific feature for it.
>
>
>
> --
> View this message in context: http://gnucash.1415818.n4.nabble.com/Question-regarding-documenting-Reversing-Transactions-tp4691271p4691292.html
> Sent from the GnuCash - User mailing list archive at Nabble.com.
> _______________________________________________
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Re: Question regarding documenting Reversing Transactions

David Carlson-4
David T.,

I am glad that you are digging into this issue.  If this results in a
change to, say, move the highlight to the new reversing transaction, then I
would ask the developer to also append a note to the source transaction
referring to the new transaction.  Then an auditor could always find the
other half of the pair.

I have another use case for this tool.  I sometimes use it to generate a
duplicate to then modify for use elsewhere, if I think it would be easier
than using the duplicate transaction tool for some reason.  This, of
course, has nothing to do with good accounting practice.

David C

On Wed, Apr 26, 2017 at 6:32 AM, David T. via gnucash-user <
[hidden email]> wrote:

> Dave C., the option already exists (under the Transactions menu), so the
> questions here are: should it be changed, and how should it be documented?
>
> My original question on this thread had to do with whether “old style”
> accounting included annotations with the reversing transaction, and I
> believe that the answer is probably “yes.” With the currently-implemented
> feature, I think it problematic that the reversing transaction is created
> without clear feedback, and without an option to add annotations to the new
> transaction. The user selects Add Reversing Transaction, and is immediately
> returned to the register with no further feedback. The feature as
> implemented requires the user to locate the newly-created reversing
> transaction and edit it to add annotations, and I believe it could be set
> up to allow a user to add an annotation before creating the new transaction.
>
> FWIW, I have already added a bug for documenting the feature (Bug 781714),
> and one for creating an entry in the glossary (Bug 781711).
>
> David T.
>
> > On Apr 26, 2017, at 6:52 AM, DaveC49 <[hidden email]> wrote:
> >
> > I wish to support Mike's position. There should be no need for a
> reversing
> > procedure to be implemented in any formal way. If you are making a
> reversing
> > transaction, then you need to notate it so that it is clear which
> > transaction it is reversing and why. The second point about other
> > adjustments is equally valid. You may have to make end of period
> adjustments
> > if you are using accrual accounting or to correct items (rounding errors)
> > etc.  Reversals are rarely a routine transaction.
> >
> > It is possibly better to explain reversing/correcting a transaction and
> > adjustments with an example(s) in the Tutorial and Concepts guide rather
> > than having a specific feature for it.
> >
> >
> >
> > --
> > View this message in context: http://gnucash.1415818.n4.
> nabble.com/Question-regarding-documenting-Reversing-Transactions-
> tp4691271p4691292.html
> > Sent from the GnuCash - User mailing list archive at Nabble.com.
> > _______________________________________________
> > gnucash-user mailing list
> > [hidden email]
> > https://lists.gnucash.org/mailman/listinfo/gnucash-user
> > -----
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
>
> _______________________________________________
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> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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Re: Question regarding documenting Reversing Transactions

DaveC49
In reply to this post by GnuCash - User mailing list
Thanks David,
It had escaped my attention that the reversing transaction had been implemented. Since I retired i am only using gnucash for my personal accounting so finding the new features is not as important for me. On the odd occasion I have had to do one i usually do it manually. I can see the advantage for someone who does not have an accounting background. I do agree with the position that if it is there, the dialog should include input of a note to add to the transaction to make it's purpose and which transaction is being reversed clear. As the transaction uid is not visible to the user it probably doesn't make sense to provide a followable link between the transactions. Also perhaps an indication in the Type column i.e if it was an invoice something like I-R at the original invoice to indicate it had been reversed and an R for the reversing transaction.
Cheers
David Cousens
David Cousens
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Re: Question regarding documenting Reversing Transactions

Adrien Monteleone
In reply to this post by GnuCash - User mailing list
Could an additional “jump” entry be placed in the context menu for reversed transactions? Instead of the current jump to the ledger on the other side of a split, this jump would hop to the transaction that has been reversed.

An additional UI helper might be to use the NUM or ACTION fields to indicate that this is a Reversing/Correcting transaction.

-Adrien

> ------------------------------
>
> Message: 3
> Date: Wed, 26 Apr 2017 14:42:08 -0700 (PDT)
> From: DaveC49 <[hidden email]>
> To: [hidden email]
> Subject: Re: Question regarding documenting Reversing Transactions
> Message-ID: <[hidden email]>
> Content-Type: text/plain; charset=us-ascii
>
> Thanks David,
> It had escaped my attention that the reversing transaction had been
> implemented. Since I retired i am only using gnucash for my personal
> accounting so finding the new features is not as important for me. On the
> odd occasion I have had to do one i usually do it manually. I can see the
> advantage for someone who does not have an accounting background. I do agree
> with the position that if it is there, the dialog should include input of a
> note to add to the transaction to make it's purpose and which transaction is
> being reversed clear. As the transaction uid is not visible to the user it
> probably doesn't make sense to provide a followable link between the
> transactions. Also perhaps an indication in the Type column i.e if it was an
> invoice something like I-R at the original invoice to indicate it had been
> reversed and an R for the reversing transaction.
> Cheers
> David Cousens

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Re: Question regarding documenting Reversing Transactions

Geert Janssens-4
In reply to this post by David Carlson-4
On dinsdag 25 april 2017 20:21:32 CEST david.carlson.417 wrote:
> David T,
> My personal preference would be to   replace the line under the description
> with a comment similar to "Reverses transaction dated mm/dd/yyyy" David C
>
For completeness I presume you mean the transaction's "Notes" field here ? The
one only visible in double-line mode ?

Geert
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Re: Question regarding documenting Reversing Transactions

Geert Janssens-4
In reply to this post by Mike or Penny Novack-3
On woensdag 26 april 2017 00:39:08 CEST Mike or Penny Novack wrote:

> On 4/25/2017 2:21 PM, david.carlson.417 wrote:
> > David T,
> > My personal preference would be to   replace the line under the
> > description with a comment similar to "Reverses transaction dated
> > mm/dd/yyyy" David C
>
> And here is where I would express a strong preference for "free form"
> because SIMPLY reversing a transaction is not the only sort of
> "reversing" transaction. I might be wanting to say things like
> "correcting the amount" or "posting to correct account", etc.
>
If with "Free form" you mean "User editable" I can agree.

However the default text should definitely mention "Reversing" as that's the
true intended behavior of the "Revert transaction" menu option.

Other than tat it's great to see others are creatively using it to avoid
laborious typing.

On vrijdag 28 april 2017 01:40:15 CEST Adrien Monteleone wrote:
> Could an additional “jump” entry be placed in the context menu for reversed
> transactions? Instead of the current jump to the ledger on the other side
> of a split, this jump would hop to the transaction that has been reversed.
>
Anything is possible as long as there's someone with time available to
implement :)

More seriously, while certainly possible it will be more challenging to
implement this without cluttering the interface and avoid confusion because of
the other meaning of jump. Still such a direct link could be very convenient.

> An additional UI helper might be to use the NUM or ACTION fields to indicate
> that this is a Reversing/Correcting transaction.
>
Good suggestion as well.



David T.,

Thanks for starting the discussion. You brought up a good point and it
solicited several good additional suggestions. As far as I'm concerned please
go ahead and file it as an enhancement request. I think our uservoice instance
[1] is the best spot for this as it allows vote. This gives useful feedback
about what users consider priority with regards to new features to add.

Geert

[1] https://gnucash.uservoice.com/forums/101223-feature-request
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Re: Question regarding documenting Reversing Transactions

GnuCash - User mailing list
Geert,

It took a little bit, but I have added Bug 782455 as an enhancement request. It’s not a uservoice page, but I have never liked that tool anyway.

David

> On Apr 28, 2017, at 3:26 PM, Geert Janssens <[hidden email]> wrote:
>
> On woensdag 26 april 2017 00:39:08 CEST Mike or Penny Novack wrote:
>> On 4/25/2017 2:21 PM, david.carlson.417 wrote:
>>> David T,
>>> My personal preference would be to   replace the line under the
>>> description with a comment similar to "Reverses transaction dated
>>> mm/dd/yyyy" David C
>>
>> And here is where I would express a strong preference for "free form"
>> because SIMPLY reversing a transaction is not the only sort of
>> "reversing" transaction. I might be wanting to say things like
>> "correcting the amount" or "posting to correct account", etc.
>>
> If with "Free form" you mean "User editable" I can agree.
>
> However the default text should definitely mention "Reversing" as that's the
> true intended behavior of the "Revert transaction" menu option.
>
> Other than tat it's great to see others are creatively using it to avoid
> laborious typing.
>
> On vrijdag 28 april 2017 01:40:15 CEST Adrien Monteleone wrote:
>> Could an additional “jump” entry be placed in the context menu for reversed
>> transactions? Instead of the current jump to the ledger on the other side
>> of a split, this jump would hop to the transaction that has been reversed.
>>
> Anything is possible as long as there's someone with time available to
> implement :)
>
> More seriously, while certainly possible it will be more challenging to
> implement this without cluttering the interface and avoid confusion because of
> the other meaning of jump. Still such a direct link could be very convenient.
>
>> An additional UI helper might be to use the NUM or ACTION fields to indicate
>> that this is a Reversing/Correcting transaction.
>>
> Good suggestion as well.
>
>
>
> David T.,
>
> Thanks for starting the discussion. You brought up a good point and it
> solicited several good additional suggestions. As far as I'm concerned please
> go ahead and file it as an enhancement request. I think our uservoice instance
> [1] is the best spot for this as it allows vote. This gives useful feedback
> about what users consider priority with regards to new features to add.
>
> Geert
>
> [1] https://gnucash.uservoice.com/forums/101223-feature-request
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