On 1/16/2020 7:13 PM, David Cousens wrote:
A Retained earnings account will be created under Equity and at the start of
a new book/file it is appropriate that its value is zero until transactions
from the Asset and Liability accounts to the Income and Expense accounts
have been made.
I'm going to jump in here again, with the understanding that I lack
"qualifications" to give accounting advice.
There are TWO (somewhat different meanings/usages for "retained
earnings" AND when accounting for a corporation, you may need an
explicit "retained earnings" account. For most of us, it just reflects
the NET of the income and expense accounts since the last time a "close
the books" operation was run.
I do not think we should be advising on "accounting for a corporation"
on this list. Not regular corporations certainly and probably not pass
through corporations or even partnerships << usually necessary to be
able to tell those receiving distributions OR NOT receiving, retained*,
what the "implied taxable amounts" are >>
Michael D Novack
* for a regular corp, retained, not distributed as dividends, remains
available for other purposes. For a regular corporation, these are after
tax. But dividends paid out of profits are different than ones that
reflect return of capital. For a pass through, all profits are taxable
to the shareholders/partners whether distributed or retained by the
entity. A regular corporation transfers form "retained earnings" to
"dividend liability" when the directors declare the dividend << when
paid, reduce that "dividend liability".
But PLEASE -- I am not a registered accountant nor have I ever kept
books for a for profit corporation, pass through, or partnership <<
entirely different for a non-profit >> I simply didn't skip over those
chapters of accounting texts, curious.
_______________________________________________
gnucash-user mailing list
[email protected]
To update your subscription preferences or to unsubscribe:
https://lists.gnucash.org/mailman/listinfo/gnucash-user
If you are using Nabble or Gmane, please see
https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.
