Example of Optimized Maintenance for Account Balances

Here’s an example of how income statement type account balances are maintained if you opt in to the Optimized Maintenance for Account Balances feature.

In this example, 2024 is the very first fiscal year of accounting activities for the ledger and there is no prior retained earnings balance.

This table shows the beginning balances, period net activity, and ending balances for an income statement type and a balance sheet type account for the last period of 2024, which is Dec-24.

Account Type	Beginning Balance for Dec-24 DR/(CR)	Period Net Activity DR/(CR)	Ending Balance for Dec-24 DR/(CR)
Income Statement	(25,000)	(1,000)	(26,000)
Balance Sheet	25,000	1,000	26,000

Before opening the first period of the new year, which is Jan-25, the opt-in for the Optimized Maintenance for Account Balances feature is enabled.

The Jan-25 period is then opened. This closes out the prior year’s income statement account balance to retained earnings.

In the case where the opt in is enabled, there won’t be another balances record maintained for the income statement account for the new fiscal year until Mar-25, the first time the account has activity in 2025. This conserves on maintaining 2 zero-balance records for the income statement account for Jan-25 and Feb-25, when the account has no activity, and therefore, there’s no need to maintain a balance.

This table shows beginning balances (with and without optimization enabled), period net activity, and ending balances (with and without optimization enabled) for the income statement, balance sheet, and retained earnings accounts for accounting periods Jan-25 through Jan-26, which is the first period of the next year.

Note: The balance sheet rows are exclusive of retained earnings.

Accounting Period	Account Type	Beginning Balance (not optimized) DR/(CR)	Period Net Activity DR/(CR)	Ending Balance (not optimized) DR/(CR)	Beginning Balance (optimized) DR/(CR)	Period Net Activity DR/(CR)	Ending Balance (optimized) DR/(CR)
Jan-25	Income Statement	0	0	0	None	None	None
Jan-25	Balance Sheet	26,000	0	26,000	26,000	0	26,000
Jan-25	Retained Earnings	(26,000)	0	(26,000)	(26,000)	0	(26,000)
Feb-25	Income Statement	0	0	0	None	None	None
Feb-25	Balance Sheet	26,000	(1,000) + 1,000 = 0	26,000	26,000	(1,000) + 1,000 = 0	26,000
Feb-25	Retained Earnings	(26,000)	0	(26,000)	(26,000)	0	(26,000)
Mar-25	Income Statement	0	(500)	(500)	0	(500)	(500)
Mar-25	Balance Sheet	26,000	500	26,500	26,000	500	26,500
Mar-25	Retained Earnings	(26,000)	0	(26,000)	(26,000)	0	(26,000)
Apr-25 through Nov-25	Income Statement	(500)	0	(500)	(500)	0	(500)
Apr-25 through Nov-25	Balance Sheet	26,500	0	26,500	26,500	0	26,500
Apr-25 through Nov-25	Retained Earnings	(26,000)	0	(26,000)	(26,000)	0	(26,000)
Dec-25	Income Statement	(500)	(100)	(600)	(500)	(100)	(600)
Dec-25	Balance Sheet	26,500	100	26,600	26,500	100	26,600
Dec-25	Retained Earnings	(26,000)	0	(26,000)	(26,000)	0	(26,000)
Jan-26	Income Statement	0	0	0	None	None	None
Jan-26	Balance Sheet	26,600	0	26,600	26,600	0	26,600
Jan-26	Retained Earnings	(26,600)	0	(26,600)	(26,600)	0	(26,600)