Ensuring proper year-end closing by checking Posting Types
When setting up accounts in Chart of Accounts, users are required to select a posting type of either Balance Sheet or Profit and Loss. These selections correspond to their respective financial statements, the Balance Sheet and the Profit and Loss statement, also known as Income Statement. Asset, Liability, and Equity accounts should have a posting type of Balance Sheet. Revenue and Expense accounts need the Profit and Loss Posting Type. This is important because the Posting Type controls the behavior of year-end closing for these accounts.
The year-end closing routine in Dynamics GP zeros out the accounts with a Posting Type of Profit and Loss and updates the selected Retained Earnings account. This process resets the Profit and Loss accounts to prepare for a new year and uses the ending balance in Balance Sheet accounts to create the beginning balance in the new year.
If accounts are incorrectly set up as Profit and Loss accounts...
