We have a client who has 2 RE accounts. The default RE account (in company profile) was setup (or changed) and is currently classified as a balance sheet account. The second which is used to close out a few departments is/was correctly classifed. They wish to change the default RE account classification, but before making the changes would like to know what problems if any this may cause.

Of course we'll ensure that all data is backed up prior to any changes. The system warns or possible problems with Year/End + balancing. Other than backups what should be known or done prior to proceeding?

Reclassifying a balance sheet account as a retained earnings account (or vice versa) is perfectly OK. There is no real difference between the two. The only difference is that a retained earnings account is a special type of balance sheet account - one to which you can post income and expense accounts during year-end.

Steve

I see. Much Thanks!

Comment contined....Just realized I had not completed my thought on the last post.


Based on the note above if there is not difference in having the accounts tagged as RE vs BS then in essence they can leave things as they are and just note the diffence???

It would be cleaner to tag accounts as R accounts only if they are really retained earnings accounts, but the answer to your question is yes.