Hi. I have been enjoying your new approach to accounting software, but have a few questions for you…
In clearing my opening balances, I could not select my General Reserves account which is where this normally happens. Everything posts to Retained Earnings (along with customer credits). Is there some way to specify which equity account is to be used. I can do a journal entry to correct this each month, but have also another, bigger problem.
With standard accounting software, normally the Balance Sheet shows Net Income as a separate line in the Equity section, but Manager puts all the additional profit/loss to Retained Earnings. Retained Earnings for the HOA is normally a fixed amount and the General Reserves fluctuate a bit with all profit/loss appearing on the Net Income line until it is reclassed at the end of the year.
Profit/loss is posted to retained earnings. Not sure why you think it’s wrong. You can rename this account to different name if you like.
If any accounting software does this, they are doing it wrong. Balance sheet is a report showing balances as at specific point of time. Profit/loss is a figure which shows business performance for the period of time.
That’s why there is another report called Statement of changes in equity which shows movements in equity accounts for the period of time. Have a look at that report.
It is not traditional accounting convention to report the profit or loss for the period in the balance sheet even though many accounting packages have included it. The report you should use to ascertain the profit or loss allocated to Retained Earnings is the Statement of Changes in Equity.