On Thu, May 19, 2016 at 5:59 PM, Mike or Penny Novack <mpnov...@mtdata.com> wrote:
> On 5/18/2016 8:51 PM, John Ralls wrote: > >> On May 18, 2016, at 7:03 AM, Aaron Laws <dartm...@gmail.com> wrote: >>> >>> On Tue, May 17, 2016 at 5:22 PM, John Ralls <jra...@ceridwen.us <mailto: >>> jra...@ceridwen.us>> wrote: >>> The Balance Sheet report shows you net worth. You probably didn't >>> recognize it because the accounting word for it is "equity". Recall that >>> the accounting equation is Assets = Liabilities + Equity*, so by >>> associativity Equity = Assets - Liabilities. >>> >>> >>> When we say Assets = Liabilities + Equity, it means All Assets = All >>> Liabilities + All Equity. This works if I include all (non-$0) assets, >>> liabilities and equity, and do so when there are no revenues nor expenses >>> (just after closing the books). At any other time, or in any other way, >>> that equation doesn't hold, and even in that specific case, it's not the >>> information I'm seeking. >>> >> ....] > b) Take closer look at the balance sheet under equity. Do you not see > there a line for which you do not have an actual account? One that has the > amount of the net of all income and expense accounts << it will either be a > gain or a loss >> > > The equation is always valid. The accounts of type income and expense are > part of the equity side. > > Michael D Novack > Thank you for your input. Your expertise is highly valued. You're right; I forgot that net gain/loss from the profit & loss is carried to the balance sheet as equity because I had only selected current assets and liabilities. The balance sheet was prepared with only those asset and liability accounts and no income and expense accounts. The image I posted online appears to have expired, so I attached it to this message. When I select all accounts (including expense and income), on the balance sheet I see "Retained Earnings", and all numbers make sense. I think this doesn't change the original request which is to find net current assets, but thank you for pointing this out.
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