Accounts closing to Retained Earnings

  • Dynamics GP

    Accounts closing to Retained Earnings

    Posted by DSC Communities on January 3, 2017 at 11:03 am

    • Denise Filip

      Member

      January 3, 2017 at 11:03 AM

      I have an issue with certain accounts not closing to Retained Earnings at the Year-End Closing.  It happens with new accounts that were set up in that fiscal year.  To resolve it, I moved the balance to accounts that I know are closing and the numbers were then correct.  Anyone know of a setup issue that is causing this?  I was told that if it is an expense account posted to Profit and Loss, it should close properly.

      ——————————
      Denise Filip
      Administrator
      ITP Business Communications, Inc.
      Hickory NC
      ——————————

    • Michael Taranto, CPA

      Member

      January 3, 2017 at 12:21 PM

      I haven’t seen new accounts setup as profit/loss not close out to retained earnings.  I usually see that it was incorrectly marked as a balance sheet account.  I included a way to fix it if that is the issue. 

      Sorry you are having such troubles.

      Mike

      Changing the posting type on an account after you close the year in General Ledger for Microsoft Dynamics GP

      Collapse imageOn This Page

      Collapse imageSymptoms

      The posting type determines how the account balance will be treated during the year-end closing process in General Ledger in Microsoft Dynamics GP. Balance sheet accounts will be rolled forward to the next year, and Profit and Loss accounts will be rolled into the Retained Earnings account.

      Collapse imageCause

      This problem occurs if you select the incorrect posting type for the account in the Account Maintenance window when you set up the General Ledger accounts in Microsoft Dynamics GP, There are two options for Posting Type: Balance Sheet or Profit and Loss.

      Collapse imageResolution

      Use one of the following methods to correct the posting type for the next year. If the account is supposed to be a profit-and-loss account, use Method 1. If the account is supposed to be a balance sheet-account, use Method 2.

      Note Before you follow the instructions in this article, make sure that you have a complete backup copy of the database that you can restore if a problem occurs.

      Method 1: The account is supposed to be a profit-and-loss account

      As a balance-sheet account, this account will have a beginning balance after the year-end closing process is completed. To change the account to a profit-and-loss account and to reverse the beginning balance, follow these steps:

      1. On the Cards menu, point to Financial, and then click Account. In the Account Maintenance window, type the account number in the Account field. Make sure that the Posting Type area is set to Balance Sheet, and then click Save. The type needs to be Balance Sheet type at this point so we offset the balance that was carried forward and it doesn’t affect the RE account now. 
      2. Use one of the following methods, depending on whether you are registered for multicurrency or not registered:
        • If you are registered for Multicurrency Management in Microsoft Dynamics GP, follow these steps:
          1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click Multicurrency.
          2. In the Maintain History area, click to clear the General Ledger Account check box.
        • If you are not registered for Multicurrency Management, follow these steps:
          1. Use one of the following methods to open SQL Server:
            • If you are using Microsoft SQL Server 2005, click Start, point to All Programs, point to Microsoft SQL Server 2005, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008, click Start, point to All Programs, point to Microsoft SQL Server 2008, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008 R2, click Start, point to All Programs, point to Microsoft SQL Server 2008 R2, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2012, click Start, point to All Programs, point to Microsoft SQL Server 2012, and then click SQL Server Management Studio.
          2. Run the following statement against the company database.
            UPDATE MC40000 SET MNSUMHST = 0
      3. Change the Maintain History settings in the General Ledger Setup window so we don’t keep the actual journal entry in the prior year, as we only want to offset the BBF that was created. To change the setting, follow these steps: 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click General Ledger
        2. In the Maintain History area, click to clear the Accounts check box and the Transactions check box.
      4. In the Allow area, click to select the Posting to History check box. We want to be able to post an offsetting journal entry using a prior year date. Click OK.
      5. Reopen the period for the prior Fiscal Year. To do this, follow these steps. 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Company, and then click Fiscal Periods.
        2. In the Fiscal Periods Setup window, make sure that the Financial period for the recently closed year is open.
      6. Enter a journal entry to offset the incorrect beginning balance. To do this, follow these steps:
        1. On the Transactions menu, point to Financial, and then click General.
        2. In the Transaction Entry window, enter a transaction that reverses the incorrect beginning balance of the profit-and-loss account.
        3. In the Transaction Date field, enter a date that is in the closed fiscal year such as 12/31/201x.

          For example, if the profit-and-loss account has an incorrect debit beginning balance of $100.00, create a transaction that credits the profit-and-loss account for $100.00, and then debit the retained earnings account for $100.00.

        4. Click Post. (The General Posting Journal should show the entry listed twice.  The first is for the original entry, but due to our settings, we won’t be keeping that, and the second set is for the BBF entry that will offset the balance.)

          Note The transaction updates only the current year because the Maintain History settings are not enabled.

      7. Change the Maintain History settings in the General Ledger Setup window back to how they originally were. To do this, follow these steps: 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click General Ledger.
        2. In the Maintain History area, click to select the Accounts check box and the Transactions check box.
        3. To post the transactions to the transaction history, click to select the Posting to History check box under Allow. If you do not want to post the transactions to the transaction history, click to clear this check box. Then, click OK.
      8. Use one of the following methods to change the Multicurrency setting back to how it originally was, depending on whether you are using multicurrency or not:
        • If you are registered for Multicurrency Management, follow these steps:
          1. In Microsoft Dynamics GP, on the Microsoft Dynamics GP menu, point to Tools, point to Setup, point to Financial, and then click Multicurrency.
          2. In the Maintain History area, click to select the General Ledger Account check box.
        • If you are not registered for Multicurrency Management, follow these steps:
          1. Use one of the following methods to open SQL Server:
            • If you are using Microsoft SQL Server 2005, click Start, point to All Programs, point to Microsoft SQL Server 2005, and then click SQL Server Management Studio..
            • If you are using Microsoft SQL Server 2008, click Start, point to All Programs, point to Microsoft SQL Server 2008, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008 R2, click Start, point to All Programs, point to Microsoft SQL Server 2008 R2, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2012, click Start, point to All Programs, point to Microsoft SQL Server 2012, and then click SQL Server Management Studio.
          2. Run the following statement against the company database.
            UPDATE MC40000 SET MNSUMHST = 1
      9. Go back to the Fiscal Period setup and mark to close the Fiscal Period for the prior year again.
      10. Now you can verify the balance on the GL account is $0.00 and then you can change the type on the account to Profit and Loss. To do this, on the Cards menu, point to Financial, and then click Account. In the Account Maintenance window, type the account number in the Account field. In the Posting Type area, click Profit and Loss, and then click Save.

      Method 2: The account is supposed to be a balance-sheet account

      As a profit-and-loss account, this account will not have a beginning balance after the year-end closing process is completed. To change the account to a balance-sheet account and to create the beginning balance, follow these steps:

      1. On the Cards menu, point to Financial, and then click Account. In the Account Maintenance window, type the account number in the Account field. In the Posting Type area, click Balance Sheet, and then click Save. Select Balance Sheet so that the correcting entry that you make in step 6 later in this section will correctly update the beginning balance for the current year.
      2. Use one of the following methods, depending on whether you are using multicurrency or not:
        • If you are registered for Multicurrency Management in Microsoft Dynamics GP, follow these steps:
          1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click Multicurrency.
          2. In the Maintain History area, click to clear the General Ledger Account check box.
        • If you are not registered for Multicurrency Management, follow these steps:
          1. Use one of the following methods to open Microsoft SQL Server:
            • If you are using Microsoft SQL Server 2005, click Start, point to All Programs, point to Microsoft SQL Server 2005, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008, click Start, point to All Programs, point to Microsoft SQL Server 2008, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008 R2, click Start, point to All Programs, point to Microsoft SQL Server 2008 R2, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2012, click Start, point to All Programs, point to Microsoft SQL Server 2012, and then click SQL Server Management Studio
          2. Run the following statement against the company database.
            UPDATE MC40000 SET MNSUMHST = 0
      3. Change the Maintain History settings in the General Ledger Setup window using these steps: 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click General Ledger.
        2. In the Maintain History area, click to clear the Accounts check box and the Transactions check box.
      4. In the Allow area, click to select the Posting to History check box, and then click OK.
      5. Verify fiscal period is open so you can post to the prior year. To do this, follow these steps. 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Company, and then click Fiscal Periods.
        2. In the Fiscal Periods Setup window, make sure that the Financial period for the recently closed year is open.
      6. Enter a journal entry to create a beginning balance for the account. To do this, follow these steps:
        1. On the Transactions menu, point to Financial, and then click General.
        2. In the Transaction Entry window, enter a transaction that creates the correct beginning balance of the balance sheet account.
        3. In the Transaction Date field, enter a date that is in the closed fiscal year.

          For example, if the balance sheet account should have a debit beginning balance of $100.00, create a transaction that credits the retained earnings account for $100.00 and that debits the balance sheet account for $100.00.

        4. Click Post.

          Note The transaction updates only the current year because the Maintain History settings are not enabled.

      7. Change the Maintain History settings in the General Ledger Setup window back to how they originally were. To do this, follow these steps: 
        1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click General Ledger.
        2. In the Maintain History area, click to select the Accounts check box and the Transactions check box.
        3. To post the transactions to the transaction history, click to select the Posting to History check box under Allow. If you do not want to post the transactions to the transaction history, click to clear this check box. Then, click OK.
      8. Go back to the Fiscal Period setup and mark to close the Fiscal Period for the prior year again
      9. Use one of the following methods to change the Multicurrency setting back to how it originally was, depending on whether you are using multicurrency or you are not:
        • If you are registered for Multicurrency Management, follow these steps:
          1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Financial, and then click Multicurrency.
          2. In the Maintain History area, click to select the General Ledger Account check box.
        • If you are not registered for Multicurrency Management, follow these steps:
          1. Use one of the following methods to open Microsoft SQL Server:
            • If you are using Microsoft SQL Server 2005, click Start, point to All Programs, point to Microsoft SQL Server 2005, and then click SQL Server Management Studio.
            • IfyouareusingMicrosoftSQL Server 2008, click Start, point to All Programs, point to Microsoft SQL Server 2008, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2008 R2, click Start, point to All Programs, point to Microsoft SQL Server 2008 R2, and then click SQL Server Management Studio.
            • If you are using Microsoft SQL Server 2012, click Start, point to All Programs, point to Microsoft SQL Server 2012, and then click SQL Server Management Studio.
          2. Run the following statement against the company database.
            UPDATE MC40000 SET MNSUMHST = 1

      ——————————
      Michael Taranto
      ERP Consulting LLC
      Pataskala OH
      ————————————————————————-

    • Denise Filip

      Member

      January 3, 2017 at 12:58 PM

      Thank you so much – this was very helpful.

      ——————————
      Denise Filip
      Administrator
      ITP Business Communications, Inc.
      Hickory NC
      ————————————————————————-

    DSC Communities replied 7 years, 4 months ago 1 Member · 0 Replies
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