Applies to:

Goal

The goal of this document is to provide the steps needed to correct wrong Retained Earnings Account balances, which were updated by posting the Year End Closing Journals based on Misclassified Accounts Types.

Solution

If the Year End Closing Journals program wasn't run and the journals posted then this would be a simple case of misclassified account types. However the case can become more complex depending on the operations performed by the user before and/or after the error is detected.

Please read Note:1050920.6 and the General Ledger Users Guide - Maintenance: Correcting Misclassified Account Types before executing the steps described below.

The general procedures are:

1. Reopen the last period of the year

2. Set the Account Type (and the Account Code Combination Type if you have also changed it) to what it was at the time the Closing Process was run (only where the account type was changed after having Open the first period of the new year and before running the Closing Process).

3. Reverse the journals created by the Create Balance Sheet Closing Journals (using the change sign method) and post it on the same period(s).

4. Change the Account Type (and the Account Code Combination Type if you have also changed it see Note:1050920.6 ) back to the old wrong account type - this should be the account type at the time the first period of the new year was opened.

5. Enter a manual journal to set the final account balance in the last period of the year to zero and post it (any account other than retained earnings can be used as offset account because this journal will be reversed later).
The Retained Earnings Account begin balance for the first period of the new year may be automatically updated depending on the current account type.

6. Change the Account Type to the correct account type.

7. Update the Account Code Combination Type in account code combinations table using sql*plus to the correct account type (check  Note:1050920.6 ).

8. Reverse the manual journal created in step 5, to put back the correct accounts balance, and post it.
The Retained Earnings Account begin balance for the first period of the new year may be automatically updated depending on the current account type.

9. Run the Closing Process again.