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Q:

When I make prior year entries to income or expense accounts, how are earnings updated?

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If the AM-A Close Date is set to allow posting to a prior period, then the program will allow such posting, even to Income or Expense accounts. When the GL-O Batch posting of those backdated entries is run, in addition to the actual entries, there will also be closing entries of YE Journal Type (Year End) closing the Income/Expense to Retained Earnings. The system will automatically generate and post those entries, there is nothing you need to do. You can not make any entry direct to Current Year Earnings; that is a purely calculated account. You can make a Journal Entry to the prior year Retained Earnings account but normally such entries would be for payment of dividend or earnings to owners or other distribution. Any adjustment to Earnings is by definition an adjustment to income or expense and DBA allows the posting of the adjustment to be made directly to the affected income or expense account in the prior period. Retained Earnings will then be recalculated to reflect the ... more
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