2009/5/2 Derek Mahar <[email protected]>: > > On May 1, 7:02 pm, Mark Carter <[email protected]> wrote: >> If I wanted to "close off" the accounts at the end of Apr 2009, so >> that I started with a fresh P&L account at 1 May, then I would shift >> all the P&L items to the opening balance. So I would debit IntRecid >> with 10, and credit Open. My new extended trial balance would look >> like this: >> >> Cash 710 >> Loan 300 >> Open -1010 > > Thank you for the very detailed answer! In a nutshell, I should enter > opening balances for Cash, Accounts Receivable (Loan), and Open and > ignore the details of the earlier repayment transactions because not > only are they in the past, but the opening balances effectively > already take those transactions into account.
Yes. The opening balance has all the profits and losses of previous periods acuumulated within it. That way, when you create an "extended trial balance" (just by typing ledger bal), your income and expenses account will show the income and expenses for the current period, which is what you want.
