I appreciate your response.

Please have a look at Posts 16 and 18, where I try to explain how we are implementing the Year Closure.

You can still do the year closing yourself and get it as you like. But if the transactions are not in balance we have to do it.

We are doing it this way in FA, by keeping the P/L transactions and only debit the year result as explained above.
This way we can perform multi year p/l and balance reports for dimensions (projects).

Joe

I have gone through the posts, and am getting a better picture, but some things are still disjointed.

A detailed instruction or flow for closings would be most helpful.  It would also help to understand the best way to setup accounts within FA. Understanding the end-game flow helps to better understand overall setup to begin with. Perhaps a good place would be in the wiki?

Brad

Joe

Where did the 20k in 3400 come from? We haven't done the closure yet.
This account should first be filled by the closure routine.
Well it is ok to make the closure manually by balancing the accounts before the closure routine.
If the balance accounts are already balanced, then FA is not doing any bookings.

Joe

Suppose Owner's Equity account# is 3300
If yearly P&L were a temporary account# of Class Type Equity, say 3400, then...

Say prior to Year end close...
3300 balance 30K, 3400 balance 20k

Assets = Liabilities + Owner's Equity
150K   = 100K      + 50K

Now Year Close...
3300 balance 50k, 3400 balance 0
Assets = Liabilities + Owner's Equity
150K   = 100K      + 50K

Why should this NOT be allowed to follow local country standards?

At the year end, after closure all balance accounts should be in balance (assets - liabilities should be 0).

An example just before closure (a very simple illustration):

Balance accounts 
Assets           Liabilities 
  1000                   500 
                           X
----------------------------
 
P/L accounts 
Cost                  Income 
 800                    1300
   X
----------------------------

The annual year result (x) is debited the P/L accounts and credited the  Balance accounts (Retained Earnings).

Now all accounts are in balance.

And doing it this way we can use the P/L transactions for accumulated project P/L statements.

Joe

This seems to be in line with what x_roast is referring to in Romanian standards.  I have run across this same problem stated in multiple posts in this forum as well as GL.  I can make it work by setting it up as an expense class, but this seems to run against what my accountant is saying as well as all of the reference documentation that I have found on the subject.

Could it be that India's standards are different than others?  Would it really make any difference whether current P&L account is Expense or Equity class as far as the way the FA system works?

In computerized accounting system, the Profit & Loss year a/c is mainly for keeping the profit or loss in the fiscal year.
I think what you mentioned P&L account is credit income debit expenses is for manual accounting system.
The COA in FA are template, you have to setup COA according to your country standard and company need.
The Romania COA should be wrong, just follow the FA standard, set Profit and Loss Year Account to Expenses class.

Regarding the  Profit & Loss account:
Please confirm that in the rest of the world (and In FA) Profit & Loss account is Credit income, and debit expenses at the end of each mount, or only in the end of the Fiscal year.

Also if you have time, please take a lock at the Romaiam COA setup that is available in FA. It might happen that this setup is not correct. due to the fact that both Retained Earnings (117) and Profit and Loss Year (121) are configured as Balanced accounts