Example of balancing by source of earnings

In this example, the following accounts are balanced:

Profit and Loss accountDebit/ CreditAmountSource of earnings account
Costs of Goods SoldDebit400Operating Results
Sales RevenueCredit1000Operating Results
Restructuring ChargesDebit50Extraordinary Results

 

If you use the Source of Earnings balancing method, when you run the Automatic Balancing of Profit and Loss Accounts (tfgld6202m000) session LN creates the postings described here.

To balance the Profit and Loss accounts:

Ledger accountDebit/ CreditAmount
Costs of Goods SoldCredit400
Sales RevenueDebit1000
Operating ResultsCredit600
Restructuring ChargesCredit50
Extraordinary ResultsDebit50

 

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