 and zero which is unique as far as I know I haven't seen any other accounting software that has that nice little breakout and so we can go in and just see our equity accounts and then I want so they have an owner's draws here so that's good we don't really need this capital account because I would rather have this retained earnings be called capital so I'm just gonna call it owner capital account or something like that that's just a preference again you could keep it retained earnings but that's what I would put it down as and then this one I'm gonna I'm gonna not use it this is owner's capital this is I'll call this beginning beginning equity this will be my equity this will be my equity account that I used just for my beginning balances so now I've got that amount in there what I'd like to do is just roll that into the owner's capital account so in other words if I go over here and I update this all I'm gonna do is take it out of out of this account 5757396 and put it into the capital account now sometimes they try to limit you from making a transaction into the capital account so you got it so because this is the account that we roll into the income statement rolls into it so they sometimes put limitations on what you can do to the capital account so let's check it out so I'm gonna try to do a journal entry to it and we'll say okay let's go to our reports and let's go to our journal report the journal report por favor that's what we need and then I'll make an ad new journal and let's just check out down here before we start it do they allow us to post to that equity account so the the owner's capital accounts yes it looks like it so we'll say this is gonna be beginning balance as of December again so the end of last year December 22 and we'll say okay this is gonna be the capital account so I called it owner's capital and that's gonna be a credit right it's gonna be let me check it out it's gonna be a credit cuz it's gonna go up over here to that one of 57396 if you get it backwards then you can go back in and say okay I went the wrong way with it and then the other side is gonna go to the beginning equity which is 57 so now we'll just put it all into one equity account so we'll just say alright let's check it out save it and see if it does what we would like so let's go back to the balance sheet and update it to refresh it I like some up-to-date reports want some old stuff in our reporting so there's the 77896 so if I go into that then we could see our journal entry that we posted to it and I'll change the beginning date range to see that so here's our journal entry if I go into that journal entry it'll take us back to our form if we needed to edit it by the way we can hit the drop-down and edit it if we had the journal entry go in the wrong way or something like that so I'm gonna go back on over back to the balance sheet okay so let's take one more check down here notice that everything's in the owner's capital which was the retained earning before if I go back to 2022 now and I say I want to look at last end of last year and I update this now it's got the two items down here the current year earnings which which is the net income which it puts into its own account it's going to track that as you know revenue happens and expenses net income on the income statement and then it'll roll it into at the end of close of each year to the capital account which was the retained earnings account so so in other words it won't look quite right until we do the closeout process which will happen in the current year so if I then go into last month let's say 2023 now we've got that one account that it's closing out to so most a lot of accounting software does this where it tries to give you that linking indication between the income statement and the balance sheet by putting the current period net income into its own line item that can actually be a little bit annoying sometimes when you're trying to break out that capital accounts say to different partnership accounts in accordance with a partnership agreement or something like that but at the other hand it does give you that nice indication and link between the income statement and the balance sheet so if we track this stuff now we've achieved our goal I think let's just double check and see if the goal has been achieved so we've got all of our beginning balances here which should tie out so we've got the checking account the checking account the accounts receivable accounts receivable the inventory inventory the seven thousand five hundred accumulated depreciation seventy five thousand here looks good and then we've got the fifteen fifteen the one the one the twenty two the twenty two and we spelled it properly this way and then we've got the owner's equity which I called owner's capital okay let's keep it at that and the other report that you could look at over here I'm going to go to the profit and loss and try to open a trial balance report so you could go to the reports and see it in a trial balance format which is often nice so we can go to the good old trial balance and if I look at it this way as of the end of 2022 we've got the same kind of format so this is quite nice a nice format to be able to do because it's a lot shorter and you only need one report to look at it but you don't have those subtotals and note the balance sheet and the income statement are on top of each other so right here you can see the owner's capital account has the fifty seven three ninety six and then the twenty thousand five in two thousand twenty two if I move up a day then this is going to move into here so and we won't have any income statement accounts on the trial balance so if I move this up to this year we have the same top half but now hold on a second the service item is still there oh no hold on I see what it's doing a comparison so this is as the end of 2022 so everything's the same but then it put in the the capital account is here as opposed to there's no income statement accounts for the year to date column and this is the last year which it basically put instead of having debits and credits it kind of put the credits as a negative number all right so we're all set up pretty much for going forward now now that we have our beginning balances we can add new data for the current year that we're working in that being 2023