How Balances are Calculated in the Financial Manager

In the Financial Manager, Sage 50 uses two different methods to calculate key balances and business-summary totals. The calculation method depends on the type of account that is used: balance sheet accounts or income statement accounts.

Balance Sheet Accounts

Balances and ratios that include balance sheet accounts list totals as of the specified date. Balance sheet accounts include cash, accounts receivable, accounts payable, inventory, assets, and liabilities. The Financial Manager Date field specifies the accounting period and as-of date used when calculating balances that includes these types of accounts.

For example, if you selected 3/15/2011 in the Date field, then Sage 50 calculates current total of all balance sheet accounts as of 3/15/2011.

Income Statement Accounts

Balances and ratios that include income statement accounts list totals as of the ending date for the specified period in which the date falls. Also, only account activity occurring within the specified accounting period is used in current calculations. Income statement accounts include income, expense, and cost of sales.

For example, if you selected 3/15/2011 in the Date field and period 3 is March 2011, then Sage 50 calculates current balances of income statement accounts from 3/1/2011 to 3/31/2011.