Understanding Automatic Categories
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Five categories have special status because their balances are automatically calculated based on other information you enter. The five Automatic categories are:
• Receivables - the sum of open customer balances
• Payables - the sum of open vendor balances
• Inventory - the sum of items' total costs
• Retained Earnings - prior years' earnings
• Current Year’s Earnings -this years earnings
Automatic Categories cannot be posted to directly with the General Journal tool. Adjustments can only be made by changing the detail that contributes to the Automatic Category's total.
You can specify more than one Receivables, Payables, or Inventory Category. Only a category without a balance can be added as an Automatic Category. Likewise, an Automatic Category with a balance cannot be removed, nor can there be less than one.
The Retained Earnings Category applies to money retained from prior years' earnings. This category can only be selected during Setup. Its Account Type should be Equity.
The Current Year Category applies to money earned this year. This category can only be selected during Setup. Its Account Type should be Equity.
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