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Converting Profit/Loss to Equity

papyrusidpapyrusid Member Posts: 1

Hi, I'm new user of wave. I'm confused about how to convert the profit/loss monthly to equity/capital of owner. can any of you give solution for this ? Thank You

in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    papyrusid,
    Accounting software's do not typically close out profit/loss. It it kept on a cumulative basis and included in the retained earnings section. When net retained earnings is presented, it represents all profits/losses to date and in the case of a sole proprietor/partnership any cumulative contributions. Some may classify drawings and distributions against it as well. Depends on the account chosen.
    Hope that helps.
    Mike G, CPA
    www.mgfinancial.net

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