Hi
My Profit and Loss Statement do not match my Trial balance Retained Earnings. Is this a bug or something that erroneously done?
Need your immediate response
Why do you expect a match? Retained earnings does not appear on the profit and loss statement. That account is a balance sheet account, perpetual since the business was started in Manager and reporting the net of all inflows, outflows, distributions, dividends, etc. Net profit on the profit and loss statement is for a defined period of time. The numbers will also depend on whether you use accrual or cash basis accounting.
Under retained earnings I have all sales/income/expenses so I expected to get the same number in Profit and Loss (Net profit).
I’m using an accrual basis.
And pull the reports for the same period of time.
If as you saying the number should not match, then how do I check my balances to be correct.
Sorry I’m new in your program and in accounting so I will appreciate any help
Retained earnings is a perpetual balance and the net profit is only for the specified period. You can use the Statement of Changes in Equity if you would like to see how the net profit forms part of retained earnings.
A trial balance only confirms that debits match credits for a period. It does not confirm either is correct. To know they are correct, you must compare balances to source documentation.