It seems I asked a similar and related question to Retained Earnings a year ago that was answered.
sagecity.na.sage.com/.../74562

The same question has come up after reading Sage 50 Accounting by Freedman and Smith, and where on 4A-317 it states, “in a single-owner business, the proper account name is Capital (account 3020) Sage 50 Accounting will not allow you to change the program heading ‘Retained Earnings’.”

Cora

As an accountant, I am confused by the quote from Freedman and Smith. According to all of my training, 'Retained Earnings' is a perfectly acceptable concept for any for-profit business, regardless of the ownership structure.

I have a few questions in the same line...

• When the Owner decides to take money out of the account for personal use this is how I was told to enter the transaction:

1060 Bank                                                       Credit $1000

3015 Owners Withdrawals        Debit  $1000

Am I doing this correctly?  If so, this account will just keep growing and growing.

• When the Owner makes a purchase from his Personal Bank account, I was told to Reclassify Account 3010 as a Bank Account and enter the transaction as follow :

2100 A/P                                         Debit  $300

3010 Owners Contributions                          Credit $300

At the moment as you can see all my purchases are sitting as A/P as I did not know how to clear it.  Is this how it should be done? If so, the account will just keep going in the negative?

Am I missing a step?  Should I transfer from 3015 to 3010 prior to clear my A/P?  Or is it fine that one just keeps growing and the other keeps going in the negative?

I am really stressing out as I have less than 2 weeks to finish my books for 2015 and I can only work an hour a night on them and I am really behind.  (I need to know how much the income taxes will be BEFORE April 18!!) Can anyone help me?  I am a visual learner so I need to SEE the explanation of the why or why not I do certain things so if someone can help me by entering their example the same way I have them above I would be a great help.

THANK YOU in advance,

I know. It also confused me which is why I posted the question.

Like I said the page is 4A-317 in book: "Learning Sage 50 Accounting, A Modular Approach" by Harvey C. Freedman (CGA) & Carol Smith (CMA). Published by Nelson Education.

Humber College, Toronto, is listed next to Carol Smith name so I take it that she may teach there.