DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Report of payment per date with all accounts?


#21

This is true.

This is not quite true. If you use the built-in Capital Accounts tab, the separation of contributions, drawings, and share of profit is entered via a dropdown list. If you use your self-created Owner’s capital, you must manually type in a description of what the transaction is for. Otherwise, your Statement of Changes in Equity will not have any categorizations to rely on. And if you are not consistent with your entries, you might end up with something like “Capital contributed”, “Funds contributed”, “Owner capital deposit”, “Owner contribution”, and so forth, when all are actually the same thing.

The benefits are consistency and less typing. Otherwise, a self-created Owner’s capital merely duplicates what is already hard-coded into the program. My recommendation is to either (a) rename Retained earnings as Owner’s equity or (b) use the built-in Capital Accounts tab.


#22

Yes I agree that you get the consistency with “Capital Account” which is a upside. If I only choose to change “Retained earnings” to “Owners Equity” and not have “Capital Account” then I will still have the same problems with probable inconsistency. Correct?

I have previous loses to transfer, if I only have “Owners Equity” I will always have “Starting balance equity” so the debit and credit balances. If I use “Capital Account” and set the starting balance, the “Starting balance equity” will only show up if things are not balanced. With “Capital Account” it looks nicer and I can have the draws/deposits even though having only “Owners Equity” and “Starting balance equity” will do the same thing. Different ways…


#23

Yes.

Again, yes. But since you are carrying forward losses, I agree the Capital Accounts route is best. You had not mentioned that before.


#24

Sorry I missed carrying forward losses. Thank you so much for all help!


#25

Is it any use of having an equity account “Current years profit or losses” so that it shows up in the balance sheet or is it enough with the “Statement of Changes in Equity” to send to an accountant since it’s already there? Having “Current years profit or losses” will require to do journal entries at the end of the year and then at the start of next year to add it to “Retained earnings”.


#26

Current period performance is the purpose of the Profit and Loss Statement, not the Balance Sheet. That is what an accountant will expect.

If you use a capital account, you will transfer a share of profits from Retained earnings to your capital account periodically with a journal entry. The frequency is arbitrary, but you would normally do that before drawing funds so your capital account does not go into negative territory.


#27

Thanks