This is necessary for cash-based accounting without formal accounting periods that have to be closed, a la the way QuickBooks Online operates.
Instead of attributing net profit/loss to Retained Earnings as part of a closing entry for an accounting period (e.g. a quarter), Retained Earnings is always calculated on the fly to ensure the basic financial accounting equation (Assets = Liabilities + Equity) always holds, given the balances for all other Assets, Liabilities and Equities for the selected date range (plus any included Journal Entries that explicitly Debit or Credit the Retained Earnings account).
[x] Add Account Sub Types to the Model/Schema
[x] Make Account Sub Type Mandatory
[x] Refactor the enumerations related to Account classification so that they can be used to programmatically identify known Account Types and Sub Types
groberts314
commented
3 years ago
This is necessary for cash-based accounting without formal accounting periods that have to be closed, a la the way QuickBooks Online operates.
Instead of attributing net profit/loss to Retained Earnings as part of a closing entry for an accounting period (e.g. a quarter), Retained Earnings is always calculated on the fly to ensure the basic financial accounting equation (Assets = Liabilities + Equity) always holds, given the balances for all other Assets, Liabilities and Equities for the selected date range (plus any included Journal Entries that explicitly Debit or Credit the Retained Earnings account).