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I have several questions on retained earnings and closing the books at year end.
1. Does webERP have automated closing of the net income to retained earnings for end of year closing the books?
2. If not how do you close out the books at the end of the year and take the net income to retained earning equity accounts?

From what I understand the proper way of accounting is to debit all the revenue and sales accounts and credit the Retained earnings account then credit all the expense accounts and debit the Retained earnings account. Or this may first flow though a income summary account then to the Retained Earnings account.

Does this need to be done manually or how does this happen in webERP

Thanks
Leland Ulrich
Hello Leland,

Quote:1. Does webERP have automated closing of the net income to retained earnings for end of year closing the books?
Yes
Quote:how do you close out the books at the end of the year and take the net income to retained earning equity accounts?

Depending on what period you select for the balance sheet all the profit and loss account balances are accumulated into the specified retained earnings account automatically. So there is never any need to close a year and never any need really to specify which period is the year end.
Thank Phil,
When does it send the retained earnings over?
Does it do it at the end of the month?
Here in the USA they typically show the net income on the balance sheet
Then at the end of the year it automatically transfers it to retained earnings.

Is there step by step documentation for how this process works?
Thanks for your help
Leland
Well it is never actually posted - it is calculated dynamically each time you run the trial balance or balance sheet
the best documentation is the code see GLTrialBalance.php

Code:
if ($myrow['pandl']==1){

            $AccountPeriodActual = $myrow['lastprdcfwd'] - $myrow['firstprdbfwd'];
            $AccountPeriodBudget = $myrow['lastprdbudgetcfwd'] - $myrow['firstprdbudgetbfwd'];

            $PeriodProfitLoss += $AccountPeriodActual;
            $PeriodBudgetProfitLoss += $AccountPeriodBudget;
            $MonthProfitLoss += $myrow['monthactual'];
            $MonthBudgetProfitLoss += $myrow['monthbudget'];
            $BFwdProfitLoss += $myrow['firstprdbfwd'];
        } else { /*PandL ==0 its a balance sheet account */
            if ($myrow['accountcode']==$RetainedEarningsAct){
                $AccountPeriodActual = $BFwdProfitLoss + $myrow['lastprdcfwd'];
                $AccountPeriodBudget = $BFwdProfitLoss + $myrow['lastprdbudgetcfwd'] - $myrow['firstprdbudgetbfwd'];
            } else {
                $AccountPeriodActual = $myrow['lastprdcfwd'];
                $AccountPeriodBudget = $myrow['firstprdbfwd'] + $myrow['lastprdbudgetcfwd'] - $myrow['firstprdbudgetbfwd'];
            }

        }
So the starting balance for retained earnings is input at System start as the Retained Earnings from Prior period Balance sheet +/- Net income or Loss from same balance sheet? Then the second month when you run the Balance Sheet the balance is brought forward and the net income/loss applied based on transactions since the start?
Exactly
Hello Phil,
So can we make journal entries or bank account entries against the retained earnings account? We have some payments that went out of Owner Equity that we were told should have come out of Retained Earnings. Thanks in advance.
-Phillip
Yes you can. But I'd use another balance sheet account for drawings, reductions of equity or a P & L account for dividends.
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