[GNC] GNC Equity and Retained Earnings not tracking together?

[Christopher Lam]

The right answer will be to submit the Transaction Report to the
accountant, have him/her calculate the Retained Earnings and Shareholder
Distribution for you, then you pay your shareholders via Assets:Bank/Cash
-> Liability:Shareholder (and later Liability:Shareholder ->
Expenses:Shareholder Dividends I guess?)

I also think you'd close the books to an Equity:Retained Earnings account
rather than Liability:Retained Earnings. I think untold surprises will
arise if closing books to Liability.

IMHO Balance Sheet's Retained Earnings seems designed to be Net Income
https://en.wikipedia.org/wiki/Net_income

That's all I know.

On Tue, 10 Mar 2020 at 15:29, Brian via gnucash-user <
gnucash-user at gnucash.org> wrote:

> > On Tue, 10 Mar 2020 at 01:02, Brian via gnucash-user <
> > gnucash-user at gnucash.org> wrote:
> >
> > > I'm wondering if GNUCash is actually calculating RETAINED EARNINGS
> > > properly.  Because after issuing a distribution to shareholder the
> > > Retaining Earning calculation increased by Net Income but did not
> > > decrease by Asset:Cash which was debited and credited to
> > > Equity:Shareholder Distribution.
> > >
> >
> > The calculation of Retained Earnings and Unrealized Gains in the
> > Balance Sheet is rather primitive, and has been as such since nearly
> > forever.
> >
> > Retained Earnings = sum total of income less expenses at the
> > balance-sheet date.
> > Unrealized Gains = sum total of (asset-liability) value, minus sum
> > total of (asset-liability) cost.
>
> Christopher, then I believe you are saying to get a proper "retained
> earnings", which recognizes the reduction of Assets:Cash and increase to
> Liability:Shareholder distribution, that one would need to properly
> close the books by moving income and expense to a Liability:Retained
> Earnings sub-account?
>
>
>
>
>
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