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Equity Accounts.


        On the Jewelry Shopkeeper balance sheet, the Total

        Equity is the calculated balance of Assets minus

        Liabilities. The Retained Equity is the difference

        between the Total Equity as calculated above and any

        individual equity accounts that you might have posted.


        Example: If you have Total Assets of $100 and Total

        Liabilities of $60, the Total Equity is calculated to

        be $40. Now, if you have created equity accounts

        (beginning with 3) such as Retained Earnings As of

        12/31/9x for a figure of $17 and you have a Common

        Stock Dividends of $5, then you have itemized equity

        accounts totalling $22. The Retained Equity is then

        calculated as Total Equity minus Itemized Equity = $40

        minus $22 = $18


        If in the above example, you did not have any values in

        any Itemized Equity accounts, then the Retained Equity

        would equal the Total Equity.


Having worked with smaller business, the Jewelry Shopkeeper is

very flexible (perhaps too flexible for some) and can allow

single-entries (e.g., adjustments to inventory, sales without

deposits, etc) For our customers who appreciate some of the

formality between the income statement and the balance sheet we

suggest the following.


1) Force the income statement and the balance sheet to agree as

of a given date. (adjusting entry to retained earnings, assets,

liabilities, opening inventory, something else)


2) Run the income statement and balance sheet daily to check for



3) When you come across a day that does not match, review the

dayþs activity for the transaction that probably cause the

mismatch and make a correction. If you are unable to discover the

cause of the mismatch yourself, you may wish to discuss it with



4) Within some months, you should have encountered most of the

types of transactions which cause mismatches and subsequently

learn how to handle them in a balanced fashion.