I'm wondering if GNUCash is actually calculating RETAINED EARNINGS properly. Because after issuing a distribution to shareholder the Retaining Earning calculation increased by Net Income but did not decrease by Asset:Cash which was debited and credited to Equity:Shareholder Distribution.
I have never run a "close" on the books. This is on GNUCash 3.8. Equity has four accounts: Shareholder Distributions, Shareholder Contributions. Capital Stock, and AAA-( Opening balance to GNUCash from previous Quckbooks). This is for a small s-corp business and has standard Asset, Liability, Income and Expense accounts. I understand that the Equity:Shareholder Distribution appears on the Balance Sheet as a negative number. But what I'm confused about is that Retained Earnings line only increases, by the yearly Net Income, and didn't decrease by the Shareholder Distribution at the end of the year. While Total Equity did decrease to the correct number. I did look at a Balance Sheet report dated 3/1/2020, since Shareholder distribution was made 12/30/2019. I would expect that when Assets decrease due to equity being removed (i.e. Shareholder Distribution) that the Retained Earnings should also decrease. Is my understanding of retained earnings wrong? Did I do something wrong only entering the one transaction above? Or, why is retained earnings on the Balance Sheet not decreasing while equity is properly decreasing following the Assets-Liability=Equity=(income-expense) formula? Is there a corporation setup or alternate report for properly showing retained earnings at a point in time? Thanks for the advice. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org 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.