Current year net income versus retained earnings

[Customer Service]

C21 (the same as BPI) does not explicitly support the concept of a “Current Year/Earnings” Net Income account. If you look in General Ledger/Configure/Company command, you can specify a Retained Earnings account which all net income flows into. This account is not the current fiscal year net income account. The program is not designed to reset this account in any way for each fiscal year. So the basic design is that this would reflect the current value of retained earnings from the inception of the company.

It is possible to make C21 track the current year net income, but the user has to do some “behind the scenes” journal entries to clear the “current” account annually.

Here is the basic concept for this:

All income flows through the Income Transfer Account into the account designated as the “Retained earnings” account in General Ledger/Configure/Company.

If you want income to flow to an account that isolates income on a fiscal year or even period basis, change the account designation in Configure/Company, or possibly change the name/usage of that account and create another account for the “ongoing” retained earnings.

Depending on how you go, you may need to do a general journal entry initially to move the retained earnings.

Then, periodically ,you need to do a general journal entry to move this income to the “ongoing” retained earnings account, clearing your periodic income account.