Example of balancing by source of earnings
In this example, the following accounts are
balanced:
| Profit and Loss account | Debit/ Credit | Amount | Source of earnings account |
| Costs of
Goods Sold | Debit | 400 | Operating Results |
| Sales Revenue | Credit | 1000 | Operating Results |
| Restructuring Charges | Debit | 50 | Extraordinary
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 account | Debit/ Credit | Amount |
|---|
| Costs of Goods
Sold | Credit | 400 |
| Sales Revenue | Debit | 1000 |
| Operating Results | Credit | 600 |
| Restructuring
Charges | Credit | 50 |
| Extraordinary
Results | Debit | 50 |