Equity Question

[ooby]

Doug Laidlaw <laidlaws <at> hotkey.net.au> writes:

> > >

> 
> I have only one account in the "Equity" subsection, viz. "Opening Balances."
> 
> The OP seems to be suggesting that the Equity placeholder should always 
reflect 
> the net equity as per a Balance Sheet.  I imagine that in closing the books 
> for a fiscal year, the net change to capital will be transferred to Equity as 
> Retained Earnings.  I come from a handwritten ledger, where Equity did not 
> change until then, so I haven't noticed it as an issue.
> 
> And really, the Balance Sheet takes net profit or loss, so without a P/L 
> Statement, strictly there can be no Balance Sheet and no figure for Retained 
> Earnings to put in Equity.
> 
> Doug.
> 
> 
Thanks Josh and Doug,
With your help and others I'm beginning to understand.  I am treating equity 
exactly as Doug has said here
"The OP seems to be suggesting that the Equity placeholder should always reflect
 the net equity as per a Balance Sheet"
Obviously this isn't the case.
Would I be correct to assume that this is being used to calculate profit/loss 
for a period?

Chris