What happens if I change the retained earnings account?

Changing the retained earnings account is a very significant revision to your accounting configuration and should be avoided if possible.

To prevent data corruption, your retained earnings account can only be changed if you first perform the following set of steps:

1. To reverse what was closed out to the incorrect retained earnings account, enter and post journals to bring the ending balances for your income statement accounts to zero at the end of each accounting year. Use a temporary account, such as a suspense account, for the offsetting amount.

2. Update the retained earnings account.

3. Reverse the journal entries used to bring the income statement accounts' ending account balances to zero to reinstate each accounting year's profit and loss, and now close these out to the new retained earning's account in the following accounting year.

   Note: The recommended reversal method for the journals is Change Sign.

4. If you have translated balances for the ledger, follow the process of deleting translated balances for a change in the retained earnings account.