When you close your accounting year in C&P, your G/L disappears–kind of. C&P calculates the agency’s net income by subtracting job costs and overhead expenses from total income. The amount of your profit is then posted to retained earnings, an equity (or net worth) account. Also, a beginning balance journal entry is posted based upon the ending balances of the assets, liability, and equity accounts. Then all of the closing year’s transactions are purged from the G/L. Any posted transactions for the new year are updated and become part of the new year’s G/L.
Category: Insider Guide