May 11, 2006, 12:58 AM
Im having a problem.
I have an account set up as contributions, drawings, and personal use of home accounts. I have a retained earnings and current earnings and total equity account.
My question.I made some errors and have corrected them. I put entries in the retained earnings that shouldn't have been there but now have posted them to contributions where they should be. These entries were for 2005.
Now I want to clear my contributions out to zero but don't know how to do it, so that my retained earnings is reading correctly.
Here are some figures for example.
Contributions has a credit balnce of 100,000.00
Drawings dr balance of 12500.00
Personal use dr balance 2725.00
How do I clear these contributions to zero. I think I would debit contributions with a journal entry but what do I credit. Thank you for your help
I have an account set up as contributions, drawings, and personal use of home accounts. I have a retained earnings and current earnings and total equity account.
My question.I made some errors and have corrected them. I put entries in the retained earnings that shouldn't have been there but now have posted them to contributions where they should be. These entries were for 2005.
Now I want to clear my contributions out to zero but don't know how to do it, so that my retained earnings is reading correctly.
Here are some figures for example.
Contributions has a credit balnce of 100,000.00
Drawings dr balance of 12500.00
Personal use dr balance 2725.00
How do I clear these contributions to zero. I think I would debit contributions with a journal entry but what do I credit. Thank you for your help