New Report to End All Reports
dartme18 at gmail.com
Fri May 20 08:42:34 EDT 2016
On Thu, May 19, 2016 at 5:59 PM, Mike or Penny Novack <mpnovack at mtdata.com>
> On 5/18/2016 8:51 PM, John Ralls wrote:
>> On May 18, 2016, at 7:03 AM, Aaron Laws <dartme18 at gmail.com> wrote:
>>> On Tue, May 17, 2016 at 5:22 PM, John Ralls <jralls at ceridwen.us <mailto:
>>> jralls at ceridwen.us>> wrote:
>>> The Balance Sheet report shows you net worth. You probably didn't
>>> recognize it because the accounting word for it is "equity". Recall that
>>> the accounting equation is Assets = Liabilities + Equity*, so by
>>> associativity Equity = Assets - Liabilities.
>>> When we say Assets = Liabilities + Equity, it means All Assets = All
>>> Liabilities + All Equity. This works if I include all (non-$0) assets,
>>> liabilities and equity, and do so when there are no revenues nor expenses
>>> (just after closing the books). At any other time, or in any other way,
>>> that equation doesn't hold, and even in that specific case, it's not the
>>> information I'm seeking.
> b) Take closer look at the balance sheet under equity. Do you not see
> there a line for which you do not have an actual account? One that has the
> amount of the net of all income and expense accounts << it will either be a
> gain or a loss >>
> The equation is always valid. The accounts of type income and expense are
> part of the equity side.
> Michael D Novack
Thank you for your input. Your expertise is highly valued. You're right; I
forgot that net gain/loss from the profit & loss is carried to the balance
sheet as equity because I had only selected current assets and liabilities.
The balance sheet was prepared with only those asset and liability accounts
and no income and expense accounts. The image I posted online appears to
have expired, so I attached it to this message. When I select all accounts
(including expense and income), on the balance sheet I see "Retained
Earnings", and all numbers make sense.
I think this doesn't change the original request which is to find net
current assets, but thank you for pointing this out.
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