How to get rid of a Net Income Showing on the Balance Sheet

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When I run my balance sheet for 2019 FY there is an amount in the net income at the bottom of the equity section.  The accountant has asked me to put it into a profit distributions account however there is not a net income account in the chart of accounts to journal the amount from.  When I click on the net income in the balance sheet to find what transaction has made this amount, there are 8 pages of entries- most of which are normal income and expense accounts.  I am unable to create a general journal without credit & debit entries to balance so not sure where to put it to?  Any help regarding how to find this amount would be appreciated.
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Helen Petch

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Posted 2 months ago

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David Elliott

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Hi Helen

I understand your problem.

I have been using this work-around for many years.

Obviously the extract is from a Trust Balance Sheet.  I created the account "Net Income trf to Beneficiary"  which I use to debit the same amount as is to be transferred to to the Beneficiaries or Partners etc - where they zero out

Yes, both the Net Income and my created line appear on the standard Reckon/QB Balance Sheet print.  However if you export it to Excel, the lines can be deleted.  (Or you could use White-Out!)

I hope that helps.  (Yes, I have debit account above Trust Capital which reduces total equity)

Best regards ... David

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Graham Boast, Accredited Partner

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Hi Helen

Net Income and Retained Earnings are special accounts is derived from the Net Income (bottom line) of the Profit and Loss.  Net Income is this financial year, and Retained Earnings in the sum of all previous financial years.

To journal the profit distribution, set up an Other Expense account called "Distribution of Profits" and an equity account called "Share of Profits - partnername".

Then Dr Disribution of Profits" Cr "Share of Profits".

Graham Boast 0409317366
Reckon Accredited Partner

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Helen Petch

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Thankyou both for your reply.  I have found a profit distribution under other expenses that I have used to fix the issue.