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Retained Earning Balance
08-01-2013, 11:24 AM,
Retained Earning Balance
Hi all,

I want to enter beginning balances for 2011 and 2012. It is a cut off data.
Data for Retained Earning(RE) is below :

RE 2011 Last Year is 25,0000
RE 2011 Current Year is 32,000

RE 2012 Last Year is 57,000
RE 2012 Current Year is 7,000

How to enter this using journal entry ? i know basically we cannot enter retained earning using journal, because data from RE is retrieve from current year or last year Profit/Loss. But this is the beggining balance cut off from other accounting software to weberp.

Your respond and reply is very much appreciate.

08-06-2013, 08:55 AM,
RE: Retained Earning Balance
You can post directly to the retained earnings account for an opening entry - the postings have to be done through a bank account receipt or payment though for the opening journal as one cannot post journals to a bank account - and presumably the bank balance needs to be entered. So the journal is simply entered as a bank receipt with an analysis between all the GL accounts for the open entry.

Quote:However, in bringing a business on to webERP it is the balances that collectively represent the total worth of the business (in historical terms) that are important to record - these are called balance sheet accounts (the expense and revenue accounts are called profit and loss accounts).

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Double Entry Bookkeeping

When the balance of every account in the general ledger is added together the net result should always be zero - that's because every entry into the general ledger is made up of two parts a debit (a positive amount) and a credit (a negative amount). eg. We spend $100 on fuel - the debit goes to vehicle expenses and the credit goes to the bank account (since the bank balance has gone down by $100) and the accumulated costs of running the vehicle has gone up by $100.

Literally every entry is recorded twice once with the account that increases and once with the account that is reduced. This is why when the debit balances are added together with the credit balances the result should always be zero. Historically when accountants checked their manual books to ensure that every entry was recorded correctly they listed all the balances and added them up on a report called a "Trial Balance" - to check that the general ledger did in fact balance. Today a trial balance off the computer is a list of all the general ledger balances - with a check total at the end to show that the computer has done its job recording journals correctly.

As a simple example consider a trial balance with the entries:

Account Amount
Bank Account 1,000.00
Debtors Control 5,000.00
Creditors Control (2,000.00)
Motor Vehicles 10,000.00
Loan (3,000.00)
Accum Profits (11,000.00)
Check Total 0.00

††††† The system stops the user from entering journals to general ledger accounts defined as bank accounts. The Bank Account must be defined as such first - from the setup tab - Bank Accounts.

However, under general ledger - Bank Account Receipts - it is possible to enter general ledger receipts - a button to enter "General Ledger Receipt" allows receipts to be entered without selecting a customer account. The analysis of the other side of the general ledger entries that make up the receipt can then be entered. This is how general ledger balances should be brought on.

Create a general ledger receipt for 1,000.00 to make the opening bank account balance correct. When creating this receipt the user must select the general ledger accounts that the deposit represents you can enter as many general ledger accounts with different amounts against each. In a normal situation the receipt may be for example the sale of a vehicle - where the appropriate general ledger account may be the loss on fixed asset disposals and maybe some of it may also be sales tax/GST/VAT. However in the case of entering the opening balances the $1,000 deposit in our example is actually

Debtors Control 5,000.00
Creditors Control (2,000.00)
Motor Vehicles 10,000.00
Loan (3,000.00)
Accum Profits (11,000.00)
Total bank deposit $1,000
So entering in the receipt the analysis as above - -5,000 Debtors control, 2,000 Creditors control, -10,000 Motor vehicles, 3,000 loan and 11,000 accumulated profits will agree then to the 1,000 received into the bank account. It is important to date the receipt in the month prior to when the new webERP system will commence activity. In this way the brought forward balances for the new period will be correct.

Where there are several bank accounts each defined with different general ledger accounts, then a receipt should be entered to each bank account with a balance (or a payment if the bank account is overdrawn) - these balances can be cleared through postings to a suspense account.

It is important that the general ledger entries to the debtors control account and creditors control account tie up to the total of the functional currency balances of the AR and AP respectively.
Phil Daintree
webERP Admin
Logic Works Ltd
08-13-2013, 04:18 PM,
RE: Retained Earning Balance
The account is too many. We have hundreds of account. Its hard to separate which account that used bank account ( 5 bank account = 5 GL account ). If we removed filter in journal entry under general ledger menu, so we can post journal to bank account / debtor control / creditor control , will it work ? We have the account in excel spreadsheet and the amount is balanced. So if we enter all the account thru journal entry, the trial balance shown in weberp should be balanced too right ?

Thanks in advanced for your advise.
05-06-2014, 07:19 AM,
RE: Retained Earning Balance
I am in the process of bringing on account balances. I wanted to make 1 G/L Journal entry to match the balance sheet of the prior period however the Bank Accounts is throwing me off as well. If I follow this thread and others as well as review the code and test on my development system it appears the difference between making a Journal Entry to bank accounts (if edit is removed) and making a payment or receipt is the missing bank transaction for recon purposes. Since this is an opening balance I won't ever be able to match it to statement.
For the initial load it would be easier to make 1 large journal Entry so I am considering turning off the edit for the day we load.

What do the experts say?
05-07-2014, 01:07 AM,
RE: Retained Earning Balance
Appears this can be done using Z_ImportGLTransactions.php
07-20-2017, 11:03 PM,
RE: Retained Earning Balance
Why don't you use other accounting software to solve this problem.

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