Home > Financial Accounting, OpenERP > Calculate Profit and Loss Manualy and in OpenERP

Calculate Profit and Loss Manualy and in OpenERP

Manual Calculation of Profit and Loss:

Balances of Income Account and Expense Accounts

Account Name Dr Cr
Sales 987000
Cost of Goods Sold 537000
Discount Received 18000
Wages and Salaries 133500
Rent 44000
Discount Allowed 34500
Vehicles Running Cost 25500
Bad Debts 43500
Depreciation 33000

Step 1: For example sales credit side balance is 98700. Enter a JV, set the debit side of sales to 98700 that sales balance becomes to 0,also forward the credit side effect to Profit and loss account.

Sales Ledger Dr Cr
Opening Balance 987000
Transfer to Profit and Loss Acc 987000
Balance Farward 0
Profit and Loss Account Ledger Dr Cr
Opening Balance 0
From sales ledger 987000
Balance Farward 987000

Step 2: Set the balances of all the income and expenses account to zero using a JV such way the Profit and Loss Account ledger will be like

Profit and Loss Account Ledger Dr Cr
Opening Balance 0
From sales ledger 987000
From Cost of Goods Sold 537000
From Discount Received 18000
From Wages and Salaries 133500
From Rent 44000
From Discount Allowed 34500
From Vehicles Running Cost 25500
From Bad Debts 43500
From Depreciation 33000
Balance Farward 154000

Step 3: Debit balance is Profit and credit balance is Loss.

Profit and Loss Calculation in OpenERP:

Step 1: Install account_regularization module in OpenERP.

Step 2: Create above accounts in OpenERP from Financial Management → Configuration → Financial Accounting → Financial Accounts → List of Accounts. Like Below.

List of Account in OpenERP

Step 5: Create Profit and Loss Account. Same like step 2.

Step 3: Enter the balances of above accounts from Financial Management → Entries Encoding → Entries Encoding by Move → New. Like below.

JV- Balances of Account

Step 4: Now Access Financial Management → Periodical Processing → Regularizations → New.

Name = Profit and Loss Balance of 2010

Regularization Time Calculation = Periods

Result Account Debit = Select Profit and Loss Account

Result Account Credit = Select Profit and Loss Account

Click Add Button= Select the Income and Expense Account (View Type of Account).

Accounts Regularization in OpenERP

Step 5: Save the Record

Step 6: Click on Accounts Regularization. It will automatically generate the difference value (sum of all debit – sum of all credits) and save in debit side or credit side according to difference.

Step 7: Access Chart of Account from Financial management → Charts → Charts of Account. You can see that balance of all income and expenses account are properly closed and balance transfer too profit and loss account.

Balances Transfer to Profit and Loss Account

  1. August 2, 2010 at 4:53 pm

    Now this is much better. I don’t really understand all of this but the tables and the figures look really neat.🙂

  2. Khursheed Ahmad Awan
    September 14, 2010 at 7:11 am

    Please provide me the accounts of Income, Expense, Asset, Capital & Liability for my help.

    Regards,

  3. September 15, 2010 at 7:01 pm

    @Khursheed brother if u asking about the control and subsidiary account of income, expense etc then it will be diferent according to business type and nature.
    here below are some examples of different business types and its financial statement preparation.may it will helpful to you.
    https://mohsinpage.wordpress.com/tutorials/financial-accounting/
    thanks

  4. Fabio
    November 29, 2010 at 4:44 pm

    Hi, in your opinion can I use account_regularization in order to create moves for closing a fiscal year? In fact I can create moves for the new fiscal year, but I can’t create moves for the old fiscal year.

  5. March 1, 2011 at 4:33 pm

    I am interested in entries. I am interested to read to your entries.

  6. vincent
    September 7, 2011 at 9:00 am

    I already installed a generic chart of account, is it posible to use this procedures in creating initial entries or equity for chart of accounts?

    • September 22, 2011 at 6:23 am

      if initial entries means opening balances then u can use ‘Generate Fiscal Year Opening Entries’ from Periodical Processing/ End of Year Treatments.

  7. pk Sherani
    August 29, 2012 at 12:43 pm

    I have one question on Profit calculation for a company.

    If a company is running on Standard cost, the profit shown in the month end financial reports is as per standard cost or actual cost.
    I mean there is always a different between actual cost and standard cost, the final profit and loss considers standard cost or actual cost in its calcuation.

    For an example if revenue in a given month is 100, COGS= 70 OH= 10
    so profit of 20 is considering Actual Cost or Std Cost?

  1. August 2, 2010 at 5:05 pm

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