Does anyone know why the year ends are automatically categorised like this. The sales are showing as debit and the second one is showing credit?
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That is correct - the purpose of the year end journal is to return the balance on all your P&L codes to zero and move the balance to the retained profit code in the capital section of your balance sheet.
Sales transactions through the year will have built up a credit balance on the sales code so the year end journal will be a debit to return it to zero. Likewise the YE journal will credit your purchases/overheads codes as they will have built up a debit balance through the year.
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Thank you for cleaning that up for me.
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