How to use divisional retained earnings accounts in General Ledger in Microsoft Dynamics GP

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SUMMARY

This article describes the functionality of divisional retained earnings accounts in General Ledger in Microsoft Dynamics GP.


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When the Close to Divisional Account Segments check box is selected in the General Ledger Setup window, you must follow these steps to successfully close the year in General Ledger:

1. In Microsoft Dynamics GP, on the Microsoft Dynamics GP menu, point to Tools, point to Setup, point to Financial, and then click General Ledger.

2. In the General Ledger Setup window, verify that the Close to Divisional Account Segments check box is selected, and then click the lookup button.

3. In the Segment ID list, click a segment ID. This segment ID is used when you close the year in General Ledger.

4. Click Cards, point to Financial, and then click Account. In the Account Maintenance window, create the necessary retained earnings accounts for the segment ID that you entered in step 1.

To find the necessary retained accounts to create, follow these steps:

1. In Microsoft Dynamics GP, on the Microsoft Dynamics GP menu, point to Tools, point to Setup, point to Financial, and then click Segment.

2. In the Account Segment Setup window, click the segment ID in the Segment ID list. Note the values that are displayed in the Number column.

3. Use the values in the Number column when you create accounts in the Account Maintenance window.

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For example:
If your retained earnings account is 01-000000-3000-001-0 and you close divisional retained earnings accounts to the second segment, here is an example of the retained earnings accounts that must be created for each account number.

In the next example, use the same Retained Earnings account number 01-000000-3000-001-0 but select to close to the first segment. Here is whatthe corresponding retained earnings accounts would resemble.

Note If a unit account is created that has a different segment value for the segment that will be used for closing, you have to create a separate retained earnings account. This separate retained earnings account must include the segment value that is used in the unit account if transactions were posted to the unit account. In the example, assume that the company is closing by using the first segment. The unit account was created as account 05-598421-6451-0002-0. Therefore, the retained earnings account 05-000000-3000-001-0 must also be created if account 05-598421-6451-0002-0 was used in any transactions. You must create the additional retained earnings account even though the unit accounts are treated as balance sheet accounts.