Starting balance of bank account goes to retained earnings

1

I’ve added an starting balance to a bank account, which manager adds to the retained earnings (not turnover or costs, just retained earnings). This can’t be correct. What am I doing wrong?

2

It may not be what you expected, but what Managerio does is not wrong.

Now, the opening balance consists of a bank balance and the corresponding equity.

Most likely, your opening balance consists of several balance sheet items that you still need to enter.

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3

Hello @Jan_Jelle_Wagenaar,

Welcome to the forum.

It’s not wrong. It’s just that Manager uses Retained Earnings as a clearing account for Starting balance entries.

The logic behind this is:

  • If all your starting balances check to zero (the ideal scenario) then the net effect on Retained Earnings is ZERO.

  • If on the other hand, you starting balances are not complete, the variance will all go to Retained Earnings – which is the best option for such variance. Where else would you classify such variance?