Home / , / When I look at my Trial Balance, it shows a line under the totals for “Prior Income” and appears to be out of balance.

When I look at my Trial Balance, it shows a line under the totals for “Prior Income” and appears to be out of balance.

If you have 2008, 2009, & 2010 open in your files, 2008 is considered your current year. You need to keep 2008 open in order to get Prior Year comparison reports for 2008 vs 2009.

Because you haven’t closed 2008, your income and expenses for 2008 haven’t rolled into retained earnings yet in the General Ledger or Trial Balance. So when you look at your trial balance for 2009, it shows the retained earnings from 2008 as a separate line at the bottom under the totals in “Prior Income”.

As long as the Ledger Debit line equals the total of the Ledger Credit +/- the Prior Income, then you are in balance.

If you look at the Balance Sheet, it reflects the amount going into Retained Earnings.