Automatic adjustments
Adjusting entries can be set to automatically adjust certain items of taxable income and expense based on selected limitations or computations.
Automatic calculations include the following:
- Reverse account balances to zero
- Adjust for differences between beginning and ending balances
- Close net income
- Reduce amounts by a user defined percentage
note
Adding new automatic adjustments or changing existing automatic adjustments impacts all associated entities and locators.
Set automatic adjustments
Open the Adjustments screen and expand the adjustment rows.
Select an adjusting entry and select Edit.
On the Automatic adjustment window, select
Account
. You can make the following selections:- Accounts: The target journal entry account. This account comes from the journal entry.
- Source Account: The balance for the target account used in the journal entry comes from this source account. Use the dropdown to choose the appropriate source account.
- Balance Type: Select the balance type of the source account (for example, preliminary, book, reclassification, or tax).
- Percentage: This allows you to indicate a percent of an account to be adjusted and thus create custom calculations.
- Reversing and Balance Options: You must select Ending, Beginning, or Difference first, and then Negate, if applicable
- Beginning/Ending: This applies the automatic adjustment to the beginning or ending account balance (commonly used for tax exempt income).
- Difference: This takes the difference in target and source account balances to calculate the adjustment (commonly used for reserve liability accounts).
- Negate: This reverses the amount in the selected target account (commonly used to reverse the FIT general ledger account).
note
An individual account can be used in only one “account” type automatic adjustment per chart type (book, reclass, tax, and so on). The offsetting account must be marked as Balance Entry.
