Archived
05-03-2008, 08:06 PM
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(2/28/2001 11:24:12 AM) Scott wrote:
...I went to the adjust quantity window and entered quantity and value but have a question on whether to use opening balance equity or retained earnings in the Adjustment account window.
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For most people it probably doesn't matter. But technically, any opening balance should be offset to some account like Opening Balance Equity, with later adjustments offset to Retained Earnings (or to some other account in cases such as losses from inventory).
Why offset to Opening Balance Equity? The standard "accounting" reason is to keep investment equity separate from earned equity--which allows the farm's future accounting statements to better reflect what the business has earned over time.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com
(2/28/2001 11:24:12 AM) Scott wrote:
...I went to the adjust quantity window and entered quantity and value but have a question on whether to use opening balance equity or retained earnings in the Adjustment account window.
====================================
For most people it probably doesn't matter. But technically, any opening balance should be offset to some account like Opening Balance Equity, with later adjustments offset to Retained Earnings (or to some other account in cases such as losses from inventory).
Why offset to Opening Balance Equity? The standard "accounting" reason is to keep investment equity separate from earned equity--which allows the farm's future accounting statements to better reflect what the business has earned over time.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com