Question on LLC member distributions w/o closing books

[Buddha Buck]

On Mon Feb 23 2015 at 11:29:20 AM Matt Kowske <jmk at cmail.nu> wrote:

> Ok, so the difference then (assuming regular distributions ARE made), is
> that with closing the books and managing the Retained Earnings account
> is that "Retained Earnings" would truly represent the amount of earnings
> retained. The distributions are NOT retained, they are distributed and
> this is reflected accurately.
>

Yes.


> If you go the route of never closing the books, this Retained Equity
> line on the balance sheet will not ever reflect the distributions made
> and so will not be what has been retained in the literal sense of the word.
>

Yes.


> Also, if you do have your own Retained Earnings account and close the
> books regularly -- does the Balance Sheet show both of these? The one in
> your CoA and the one that is calculated automatically? Seems like that
> could be a problem.
>

I haven't tried, but I would suspect that if the books are just closed, so
the synthetic Retained Earnings is zero, then it might not show it,
especially if you have the "don't show zero-balance accounts" report option
set.