I just figured it out. AP and AR should become zero as nothing is outstanding. This makes perfect sense to me now, but I had some trouble placing the right numbers initially at the beginning of the year, since I did not start from scratch I took over the books mid-year and have "full control". Full control means the bank account matches invoices perfectly, possibly skewed by the starting numbers. Now I'll just post some of the invoices towards AR/AP instead of the bank, and everything should be fine.
Thanks for the lessons anyway. Marius K. Finance wrote: > I suggest you check which exact invoices where outstanding at the > beginning of the year, and check HOW you booked the payment of those > invoices. (Chances are you coded the payment to costs) > Then correct that by booking the payment debit on Accounts Payable > instead of debit on costs or wherever you put them. > > (Assuming you paid those invoices by now. > Otherwise they are well overdue and you will be receiving very > unfriendly letters etcetera..) > > BTW: Bank and AR versus AP and common shares? No 'Retained Earnings' on > the credit side as well? > Common shares is a normally a fixed amount (x shares at value y) and NOT > a 'balancing account'. > Your friend may know more, but does he know enough? > Accounts are no joking matter, ask anybody who ever went bankrupt! > > Grtz, > > Paul
