Being designed for smaller business, the Jewelry Shopkeeper is very flexible (perhaps too flexible than some would prefer) and can in certain instances permit the posting of one-sided transactions (e.g., adjustments to inventory without an off-setting accounts sales without deposits, etc.) Essentially, any one-sided entry that you post without making an off-setting entry will usually result in the difference being posted to equity. For our customers who appreciate more 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 correlation.
3) When you come across a day that does not match, review the day’s activity for the transaction that probably caused 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 us.
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.