Converting Profit/Loss to Equity
papyrusid
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
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papyrusid
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
Comments
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