Opening balance in trial balance - Monthly

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Posted on by niq

Hi,

This is a follow up concern. I have done the fiscal year closing-opening periodic for this. the balances was shown as an opening balance for January 2017 and is okay. But when we run the February 2017 trial balance, the real accounts got an opening balance, which according to the accountants must have zero balance also. Please tell if im missing something here.

Thank you in advance.

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Ludwig Reinhard Microsoft Employee on at

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Hello niq,

What do you mean by the real accounts that got an opening balance?

Can you elaborate on that and let us know why they should have a zero balance?

Many thanks and best regards,

Ludwig

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niq 80 on at

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Hello Ludwig,

For a clear explanation of my problem, below illustrations show comparison between January and February 2017 trial balances. In January January, Nominal accounts (assets, etc) are with ledger codes from 1000-3999* , these should have the opening balance and the Real accounts (liabilities...) are with the ledger codes from 4000-10000 have no opening balance. While the February 2017, when we run it, the Real accounts got an opening balance of more than 0.

January TB 2017

February TB 2017

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André Arnaud de Cal... 301,030 Super User 2025 Season 2 on at

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Hi niq,

What is the date selection you used for February? If it is Februari 1 till end Februari it will use the end balance of January for the opening balance which makes sense to me. If you select Janury 1 as start date for the trial balance the opening balance will be the same as the January report. But then the other columns shows data for January and February in total.

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niq 80 on at

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Hi Andre,

My Start date in February Trial balance is 2/1/2017 - 2/28/2017. What should I do? or What should I tell my Accountant regarding this? is it possible to have the February 2017 be zeroed like the January TB.

Thank you

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Ludwig Reinhard Microsoft Employee on at

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Hello niq,

I agree with Andre here.

Take your account 4000-A as an example.

The closing balance in your first report for January is -85760,26

This closing balance is identical to the opening balance for February if you run the report starting from 1st February.

Accountants call this 'account identity principle'. If this would not be the case, there would be something terribly wrong.

Why is it that you expect a opening balance of $0 in February for your REAL accounts?

And can you explain why you differentiate between REAL and NOMINAL accounts?

I only know that companies in high-inflation countries need to make a difference for that but cannot see the link to the problem/question you illustrated above.

Best regards,

Ludwig

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niq 80 on at

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Hi,

I got both your points, thank you for the explanation. I just don't know how to explain this with our accountant that he can't have 0 opening balance in February trial balance. He wants me to find a solution to generate a trial balance with 0 opening balance in February.

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Ludwig Reinhard Microsoft Employee on at

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Hi niq,

Without having more information I would say that this can't be achieved.

Best regards

Ludwig

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niq 80 on at

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I see, anyway thanks for the help Andre and Ludwig. I understand now better.

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Ludwig Reinhard Microsoft Employee on at

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Hi niq,

If you get some additional information from your accountant about this one day then it would be great if you could share them here.

Thanks,

Ludwig

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Community Member on at

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Hi niq,

From your screenshots, I think the issue lies on the account definitions:
- Accounts 1***: Assets (Balance sheet)==> Opening balance = Closing balance of the previous period.
- Accounts 3***: Liabilities (Balance sheet)==> Opening balance = Closing balance of the previous period.
- Accounts 4***: Revenues (Profit & Loss) ==> Opening balance = 0.

For Accounts 4***, could it be that they have Main account type = Asset/Liability instead of Revenue/Expense (GL/Main accounts/ General tab/ Main account type)?

S.

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