I had a user who needed to post to 1

[PTina]

I had a user who needed to post to a closed year so I re-opened the fiscal period and checked Allow Posting to History in GL Setup. I know I cannot re-close the year so how will the re-tained earnings account get updated?

Does the retained earnings account get updated automatically when you post to a historical year or will a manual transaction need to be done to update this account?

Any help appreciated. Thanks.

 

[VictoriaYudin]

If the year was already closed in the GL and you reopened the fiscal period and checked Allow Posting to History in GL Setup, when a GL transaction is posted to that closed year GP will automatically close that transaction and update the ending balances for that year and the beginning balances for the next year. On the posting journal you will actually see 2 transactions - one for the actual posting, one for the closing trx. There is no 're-closing'. Hope that helps.

 

[PTina]

I know thay the year can only be closed once. I guess I wanted to understand how the retained earnings account gets updated.

The 2 transactions that are created when you post to a historical year - doesn't this just adjust the beginning balances? (i.e carry forward outstanding amounts). I guess I just don't see where the retained earnings a/c gets updated.

Example:

Date Dr Cr
Dec 31 100
Dec 31 100 (bal c/f)
---- ----
100 100
******************************
Dr Cr
Jan 1 100 (bal b/f)

 

[VictoriaYudin]

There are 2 types of accounts, Balance Sheet and P&L... A P&L account gets closed out to Retained Earnings, a Balance Sheet account does not. So let's take an example of a transaction with one of each:

fiscal year: 12/31
trx date: 12/15

Here is what will happen when you post this trx (and this is what that posting jounal will look like):

DATE ACCOUNT DR CR
12/15 Cash 1000
12/15 Travel Expense 1000
12/31 Cash 1000
12/31 Retained Earnings 1000

The first two lines are the actual transaction and this is what updates the closed year's ending balances. The last 2 lines are the 'close' which transfers the transaction to the opening balances for the next year.

There is probably a much more lengthy and detailed explanation somewhere on PartnerSource, but this is the gist of it.

 

[PTina]

Thanks for the info.