[GNC] Handling of Equity and Retained Earnings
David Cousens
davidcousens at bigpond.com
Thu Jan 16 19:13:24 EST 2020
Adrien,
A Retained earnings account will be created under Equity and at the start of
a new book/file it is appropriate that its value is zero until transactions
from the Asset and Liability accounts to the Income and Expense accounts
have been made.
The information about Assets and Liabilities carried forward into the new
book is only the balances, not any detail of how those balances are arrived
at. What is retained about that is normally reflected in the account
structure. permanent assets will likewise have a opening balance. There are
no opening entries to Equity other than the Opening Balances until you start
creating transactions. Capital transactions being funded from equity and
operating transactions funded from equity via the temporary accounts.
David
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David Cousens
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