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Net incomes differ between the Balance Sheet by Class and Profit & Loss by Class reports

The Balance Sheet by Class report is only available in QuickBooks Premier and &qb_enterprise_solutions;.

The Balance Sheet by Class report makes calculations to balance a transaction's classes. In some cases, this causes the net income for a class on the Profit & Loss by Class report to differ from the net income for that same class on the Balance Sheet by Class report.

Why is this important?

The two primary financial statements in QuickBooks are the balance sheet and the profit & loss statement. Net Income appears as a line item on both reports:

  • It's the bottom line on the Profit & Loss Standard report.

  • It's a component of Equity on the Standard Balance Sheet report.

The net income number is always the same between the two reports.

However, the net income for a class is not always the same on the class-based versions of the same reports. This happens because the Balance Sheet by Class report handles a few transactions differently than the Profit & Loss by Class report. Note: In total, the net income amounts always match.

For example, consider this invoice with three line items in three different classes:

invoice line items

The customer pays early and receives an early payment discount. You apply the discount in this window:

Discounts and Credits window

The two class reports handle the discount transaction differently:

  • The Profit & Loss by Class report shows the full discount for Class 1. The report increases discounts for Class 1, so net income for Class 1 decreases.

  • The Balance Sheet by Class report allocates the discount based on the classes on the original invoice. The original invoice used Class 1, Class 2, and Class 3 in equal amounts. The report increases discounts for Class 1, Class 2, and Class 3, so net income for all 3 classes decreases.

The net income on the two reports doesn't match. See other unsupported transactions and their solutions.

KB ID# H_NET_INCOME_BAL_SHT_BY_CLASS_RPT
12/5/2016 4:44:38 PM
PPRDQSSWS406 9138 Pro 2017 95a58e