Net Income does not match between PnL and BS reports

Hi PLEMCo!

Thanks for reaching out to us. The Balance Sheet report shows net income for the current fiscal year and it should match the net income on the Profit & Loss report. Let me help you in fixing it.

First, make sure that the filters like reporting method and dates are the same. Also, you'll want to review the fiscal year by following these steps:

1. Go to the Company menu and select My Company.
2. Select the Pencil icon.
3. Under the Report Information tab, make sure Fiscal Year is set correctly.

If the same thing happens, you can rebuild your company file to resolve data damage. Please follow the steps in this article: Resolve Potential Data Issues in QuickBooks Desktop.

I also added this link: Customize reports. This will explain more about how to customize your reports to get the right data.

We'll be right here if you need more assistance with this. Thanks!

First, thank you for the prompt response.

We think we've tracked down the source of the problem but can't tell how to fix it.

As I mentioned there is a unrecognizable figure that (on the BS) is traded off between the net income and Ret.Earnings(RE), so everything balances but then the Net incomes don't match between the BS v PnL reports.

I've attached all the transactions on the RE, and at the top there is a mysterious "Closing Entry" which accounts for the discrepancy. This was not entered by us nor is it editable or accessible.

I understand Quickbooks does this automatically.

The other unknown is why on the last day of February which on our Jan-Dec FY has no special place.

A few month ago our company was bought by another organization which uses a Mar to Feb FY, and they asked to move our data to their version of QB. It seems that our FY was shifted (unnecessarily) into the prior years and these extra entry was made without anyone knowing. I'd really like to have our Balance sheet not appear discrepant, at least for all prior years. Is there a way to delete the effect of this Closing entry on the reports?

First Thank you for the prompt response.

We have tracked down the problem but don't know how to fix it.

To repeat, there is an unrecognizable figure that is swapped between the Retained Earnings (RE) and Net income on the BS. I've attached all 4 transactions to the RE here. You can see there is a mysterious "Closing Entry" at the end of February which has no significance to our FY Jan-Dec back in 2020. We see the same Entry in all previous years where none existed. This entry is not editable nor accessible, and must have been generated by Qb w/o asking.

The other mystery is Why February?, as it happens in 2021 our company was purchased by a larger organization which has in fact a Mar-Feb FY. A few months ago they asked us to move our data to their version of the QB. whereupon this entry must have been automatically made.

I really would like our BS to match what we're reported in the past years, if not also going forward. Is there  a way to remove the effect of this Closing entry, at least in the reporting?

If the P&L are both run on the same basis (cash or accrual) and both are run for This Fiscal Year-to-Date , OR as long as the P&L starts on the first day of your fiscal year and ends on the same date as the balance sheet, like then end of last month, then Net Income should match.

Basically, Net Income on the balance sheet will always be the same number as a P&L dated from the beginning of the fiscal year to whatever As of date appears at the top of the balance sheet.

Thanks.

From what you wrote, the ONLY way to avoid the "closing Entry" is to stay within the current year.

Otherwise (if a FY boundary is crossed) it will always be there, and the two Nets will not match by the amount of the "closing Entry".

Is this correct?

Thank you kindly for your time.