Three Scenarios > 3) Legacy Data, !(t=0)
When you start out with a Legacy Data BUT you do not want to or can not go all the way back to the beginning of each Asset and Liability Account to the original ZERO opening balance transaction, you will need to make one major decision.
Option 1- Track transactions for each account from statement start date for each account. With this each account will likely start with data on a different date unless you have accounts that have the exact same date cycle. Some accounts that engage with others via transfers will have transactions on your books before those they may transfer to are active. If transfers transpire during that time, a unique accounting problem arises in addition to "fabricating" the opening balance for each account.
Option 2 - Track transactions for all accounts starting with an arbitrary, singular date. With this, a running balance will be calculated and an opening balance will be "fabricated" for each account for the exact same date. It is a little easier if the date you select is a statement start date for one or more of the Accounts you are tracking, but that is NOT required.
The cool part about this is that with both options you will get to learn about fabricating money from thin air.
Both options require you to "fabricate" an opening balance. In fact, this is calculated, but as you will see in the examples below, the mechanical nature in which it is entered into your books is stateless, and thus, from the perspective of the books, money was fabricated from thin air. And while this might seem like a play on words now, once you realize the underlying concepts being presented, the ability to assimilate this with real money fabrication is powerful.
I personally prefer Option 1. The more popular path is Option 1, but Option 2 might be preferred by some too who prefer a bit more confusion for one reason or another.
Option 1 is simpler in all ways. No running balances need to be calculated for any accounts. You just need to enter opening balances (fabricate money from thin air) and then you need to know how to magically dissolve money that is transferred to an account that exists but is not in existence in the books yet. The dissolving trick is as easy as the fabrication trick. That's why this is by far the easiest approach.
Option 2 requires manual math to calculate the starting balance on the date you start recording it AND it requires you to use some "faux data" and numbers that are not easy to verify later on without an original notes worksheet nearby. With this system you'll never need to track the disappearance of ghost money, so most don't think more about it, unfortunately.
To Implement Option 2 Successfully...
Take statement START AMOUNT and add or subtract information until you have the "running balance" for the start date selected for your Digital Journal. Alternatively you can start with a Statement END AMOUNT and work backwards to get to the running balance for a given date.
That "running balance" for your selected start date needs to be calculated for all Asset/Liabilities you will be tracking with Journals. Then, you will need to enter and note that date and amount in three different places:
Statements Worksheet - A "calculated/fabricated" starting balance needs to be entered in the starting cell for each data block.
Statements Worksheet - A "faux" statement start date needs to be entered in the Statement Start Date Column for the first statement for each account.
The reason I personally don't care for Option 2 is 1) The additional work required to get running balances and 2) The need to enter start dates associated with those opening balances that I could never quickly and easily verify with paper statements at a glance in the future. I would always need the scribbled notes I used to get the running balance for each to verify that number was still accurate.
Now that you are duly loose, it's time to work through Option 1 with ease...
Option 1
Statements Worksheet
Your starting balance goes in the red circle for each data block.
This image is what you might see once you load in your legacy data.
Asset/Liability Journal Worksheets
Your opening balance record would look similar to this...
======== Opening Balance Record Details ========
These are the same for all three scenarios. the only difference is the Amount. Scenario 1 and 2 are ZERO and Scenario 3 (this one) has a non-zero value.
Date >> The Date for the entry should be the same as the First Transaction date and/or the First Statement Start Date, which ever you prefer.
The date can NOT be prior to the First Statement Start Date. The system with throw an error on the Statements Worksheet. This error is to prevent accidentally entering future transactions with an errant date prior to the opening of the statement. This is a subtle but important mechanism for data integrity protections.
Payor/Payee/Description >> Enter anything you'd like. "Opening Balance" is common.
Amount >> NON ZERO...
Acct2 >> "99_opening_balance" OR "Opening Balance" OR the comparable Opening Balance Account listed in the bottom of your chart of your Chart of Accounts that is a ZAPSpecial Account designated for Opening Balances.
This value MUST be selected from the drop down. If you do not see a proper value look in your Chart of Accounts to be sure it's there and then look for it in the Drop Down again. If you can't find it, seek professional support. Do NOT make-up the account in the drop down box. That will leave a red flag in the corner of the drop down box and that is not good.
TxnID >> 0
This is very important you set this to ZERO to provide a proper sort functionality in the future.
A Balance Sheet view worth GAZILLIONS ( if you play with it long enough...)
This looks similar to that found in Scenario 1 EXCEPT money appeared from nowhere!!
Without ZAP Special, how would this report be "fabricated"?
The entry for 3010.10 would have been made in a "suspended expense account". B/C it was/is suspended, it would NOT show up on the Income Statement and thus Net Income would be ZERO, just like here in #8.
So how would they have presented this for this singular start date at time t=0 ?
They'd likely just enter the value into the "Starting Net Worth" as an "override" to the calculated value at the OPENING OF BUSINESS (OOB) THAT DAY which was in fact ZERO, because they had no accounts that morning...
But magically they have a Net Worth of $3010.10 by close of business (COB) that very same day!!
Some of you may be thinking "yeah". So what.
Others of you are hopefully getting a better picture now quickly.
If you did this exercise along with me, what you in fact just simulated was the REAL LIFE EXPERIENCE of a FEDERAL BANKER when FABRICATING MONEY OUT OF THIN AIR.
Watch the video to the right starting at 0:32 seconds.
"The Banks have an account at the FED much like you have an Account at a Commercial Bank. To Lend to a Bank we simply use the computer to mark up the size of the account they have with the FED".
Imagine being in the money lending business and waking up in the morning realizing you only have $3,000 in your account to lend out. Then imagine going to bed that night with a balance of $33,000 in your account to lend out without having to do anything...
This is the life of a select group of Bankers. They pay nothing for their product (money) , there is an endless supply of it whenever they need more, and the only thing they have to do is transfer a few characters from their digital account into yours to start earning interest. Welcome to the very simple world of Federal Banking.
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You know that 1.5 TRILLION in college debt out there?
The money used to create that debt was created with a few keystrokes on a keyboard. That's all.
When banks get more money, the only option they have for distribution is lending.
To lend more, they will up the amount people can borrow for an existing set of standards and/or lower the lending standards to allow more people into the borrowing game.
In the case of College Tuition, the amount available to Students was raised first. Then the Schools raised tuition to max out the permissible lending. Then the amount available to Students was raised. Then the Schools raised tuition to max out permissible lending. Then the School Presidents gave themselves and all those around them raises. Then they invested in unnecessary infrastructure improvements with massive "annual maintenance" contracts.
Meanwhile, the youngest and brightest in our country were tossed into debt slavery that all started quietly with the simple flick of a digital pen and a modest increase in permissible lending each and every year...
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Once you understand how this works in the US at the Federal Level, you can see that most folks would not fall for it.
That's why they also then seemingly allow the largest banks to fabricate money too with the Fractional Reserve stuff which really is just the same thing (but with theoretical limits that are audited by who?) ...
and if that's not enough to fool us, that's when they start mixing the lending across Nation State Borders.
At that point, the few that can follow along in a single country tend to forget that that same familial types in those countries play the same games and they all just swap debt across borders to keep everyone bound up.
It's all just done with the flick of a digital pen these days,
and yet everyone is CONVINCED it's "our money" they are lending out and that we owe other countries something for nothing!!
(smhn...over and over again...)
All money is created at the Direction of or With the permission of Federal Reserve Bankers.
All money is fabricated by changing a single field in a computer system from time to time?
So exactly who do we owe money too again? The Digital Ether?
For Full Interview please search for "Scott Pelly Ben Bernanke Youtube"
The links may change as versions of the video seem to get removed from Youtube from time to time...
