You need to assign all GL accounts to a GL account type to designate the overall classification of a GL account. The following GL account types are available: asset, liability, equity, retained earnings (R/E), revenue, expense, suspense and statistical.
Asset, liability and equity accounts are balance sheet accounts. The year end balances for these accounts are rolled forward into the beginning balances for the following year during the GL period closing process for the year.
Revenue and expense accounts are profit and loss accounts. The year end balances are closed to the retained earnings account during the GL period closing process for the year. The beginning balance for each fiscal year is zero for these accounts.
The retained earnings account type is a special type of equity account. You only need one retained earnings GL account. This is the account used to roll up the Revenue and Expense accounts into at the close of the fiscal year. If one retained earnings account is required for each year, create the additional accounts as equity accounts and manually transfer the amounts at year end.
Statistical accounts are for processing non-financial transaction data.
You cannot add or remove the available GL account types but you can change the description for a GL account type. To change the description of a GL account type:
- Click the GL Account Types link from the Main Menu. The GL Account Types screen opens.
- Click into the Description field for the account type name you want to change.
- Enter the new name of the GL account type.
- Click the Save button.
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