Question

[John Ralls]

> On Mar 7, 2017, at 12:22 PM, D Wt <dtjan10 at yahoo.com> wrote:
> 
> Thanks John. I did set up two accounts in equity as capital accounts for both members, and entered each one's present equity against opening balances. But I don't think I follow you on where to go from there. The balance sheet shows a small retained loss for 2016, which needs to then be subtracted from each partners equity, since it will pass through to them. But since retained loss is not an account, I can't simply transfer those losses to each partner. Are you saying there needs to be a separate account made for retained loss, in order to zero the calculated one?
> 
> In other words, is the retained loss line in gnucash added automatically in order to balance the books when a true retained loss account has not been created? 
> 

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Yes, if there are balances in any of the Expense or Income accounts then the Balance Sheet will net those amounts into a Retained Earnings line to make the report balance, i.e. Assets = Liabilities + Equity.

Tools>Close Book will create a close transaction that zeros out each Expense and Income account on the date you specify, transferring to the accounts you specify; you can use separate accounts for income and expense if you like. If you then run the balance sheet report for the date of the close transaction (assuming you don't create any new income or expense splits for that day after running the Close Book tool) then there will be no balances and the balance sheet won't display the Retained Earnings line.

Once you've closed the book (normally done at the end of the fiscal year after all of the transactions for the year have been entered) then you can transfer each partner's share from the target accounts for the close transaction to a partner account somewhere if you want.

Regards,
John Ralls