Balance Sheet and P&L

The Financial Integration (FI) aspect of Compiere means Accounting Consequence, and stuff that makes Accountants rule. Well, IANA.

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Balance Sheet and P&L

Postby alcatel008 » Fri Oct 29, 2004 9:52 am

Hi,
I can login in now =)
I have some doubts Balance sheet and P&L in Gardenworld though I have tried to ask other people. I will be appriciated if you can explain a little for me.
The question is as following.

Is it necessay to define the accouting settings such as report line set and accounting elements in compiere before I want to show the Balance sheet demo?

If it is true,how to define the account expected sign with elements? coz I defined salesrevenue as credit but it showed on the P&L with negetive number.

And I should prepare the P&L report first and then Balance sheet, right? However, I always got a correct P&L but a balance sheet with wrong number. How can I set the report source with Owner Equity?

Hope you can give a favor! Thanks in advance!

Best regards,
Alcatel
alcatel008
 
Posts: 3
Joined: Fri Oct 29, 2004 9:15 am

Postby red1 » Fri Oct 29, 2004 10:22 am

Hi Alcatel,
How did u login after that error? Pls tell so that others can learn from you to. :o I dont have time to worry bout this buletin board as i dont charge for it nor pay anyone to program it. :(

On your questions, first of all, have u bought the Manual? It explains on some issues you raised. If you have not, i strongly recommend you to do so, and just give me the page number u dont understand so that i can asist. Otherwise it will be dificult for me to check up, as i have to restart compiere again from a clean demo and that takes time. So pls help me to help u.

On GardenWorld demo, u do not need to change the Report Line and Column set just to make it work. To change the accounts it refered to, its explained in the Manual. Of course u have to define the accounts elements that u are refering to otherwise they wont be used to calculate and printed out.

On your Owners' Equity, u have to go to ReportLineSet > ReportSource > select the Type there as 'Account' first so that the AccountElement appears for u to choose OwnerEquity account id.

About Year-to-date u can do that in the ReportColumnSet > ReportColumn > AmountType > YTD. But u have to select the RelativePeriod as -1 so that it gives the brought forward as closing balance of last year. All these are hinted in the UserManual pages 481-485. :)

red1
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Postby alcatel008 » Fri Oct 29, 2004 10:51 am

Hi red1,
I have no idea just did what you told me ...back and refresh then I can post:)or maybe after registration?

I have bought the manual 2.5.1b. seems I'd better to read the latest one :(

I remember in balance sheet of Gardenworld. Owners' equity always keeps zero though I checked there was an accout element id in its report source.

Thanks a lot!
Best regards,
Alcatel
alcatel008
 
Posts: 3
Joined: Fri Oct 29, 2004 9:15 am

Postby alcatel008 » Mon Nov 01, 2004 4:08 pm

Hi red1,
Sorry for bothing you again.
Could you pls explain to me the questions as following?
After I get the number of Profit from P&L report, how can I link it with "retained earnings"? use GL Journal window? link it with "net income"? coz I opened the report line set of Balance sheet about Gardenworld, I can not find the account ID for Sales, COGS,Expenses, etc. just Assets, Liability, Owners' equities.

Best regards,
alcatel008
 
Posts: 3
Joined: Fri Oct 29, 2004 9:15 am

Postby red1 » Wed Nov 03, 2004 12:38 pm

Hi Alcatel,
Since this is an acocunting issue, i got an accountant who gave me the following answer, ENJOY! :lol: if still unsure, keep asking, keep knocking!

(a) there is presently no link...

(b) he is not looking at the the GW Element list hard enough! sales
start with 4, COGs with 5, Expenses with 6 etc...!

(c) To make a balance sheet that always balances you need to write a
report that does as follows..

Assets .. list all the accounts starting with 1

Liabilities .... list all the accounts starting with 2


Shareholders Funds (the harder part)
..... Shares/Stock Issues ... some accounts starting with 3
..... Retained earnings from prior years ... these will be other
accounts starting with 3
..... Year to date profit ... the sum of all P&L accounts (starting
with
4,5,6,7)

so .. your year to date profit forms part of your balance sheet even
though the values are not reflected in accounts which form part of the
balance sheet account codes.. some non-accountants struggle with this
idea but the shareholders obviously own the years profit so it needs to
be shown in the shareholders funds section of the balance sheet ;-)

To get that number you just have the report add up all the P&L accounts
and add it to the value of the shareholders funds account balances in
the Balance Sheet.

(d) At year end (for a profit result) you will do an entry like
debit... the last account in your P&L accounts [which you exclude from
P&L reports]
credit ...... retained earnings account in the shareholders funds
accounts.

As you can see, it does not matter when you do this becuse all it is
doing is reducing the value in those P&L accounts which you are adding
to the shareholders funds in the balance sheet... so if you set your
balance sheet reports up correctly it does not really matter when/if
you
do this last entry. Mostly we do it out of force of habit and for the
certainty of having a hard-wired number in the account that we know is
correct and audited etc.
red1
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