Posting Transaction for Retained Earnings Account

As part of each period's posting, a special line item is generated on the Financial and Statistical General Ledger Reports for the year-to-date retained earnings account to identify the entry for the current period.  This amount is posted to the retained earnings account without generating a transaction.

If both the year-to-date retained earnings account balance and the balances of income and expense accounts were included in the Financial and Statistical General Ledger Reports, the reports would be out of balance by the amount in the year-to-date retained earnings account.  For this reason, the total of the year-to-date retained earnings account is not included in the total General Ledger debits and credits. 

Note:  Because no transaction is generated for the profit or loss for a period, the year-to-date retained earnings account is not listed accurately on transaction reports or displayed accurately on transaction inquiry screens.  Grand totals on transaction reports that contain the year-to-date retained earnings account are also inaccurate by the profit or loss for the reported period.