Menu option Settings > Accounts > Categories defines whether an account number is an asset, liability, income, expense, etc. Amounts are normally displayed as positive (user friendly) for the type of account, unless it is a reversal of the norm.
For example, an income account has a credit balance (normally a negative sign), but it would display as positive (user friendly) on reports or when browsing account balances. However, when browsing individual transactions, signs will show as they truly are (debit or credit transaction).
The only exception to this rule is if in a financial statement the General tab is set to “Show true sign”.
The “verbal way of saying” how signs are displayed for account variances is this:
- Good variances show as positive.
- Bad variances show as negative.
- Over in assets to last year or budget is good.
- Under in assets to last year or budget is bad.
- Over in liabilities to last year or budget is bad.
- Under in liabilities to last year or budget is good.
- Over in equity to last year or budget is good.
- Under in equity to last year or budget is bad.
- Over in revenue to last year or budget is good.
- Under in revenue to last year or budget is bad.
- Over in expenses to last year or budget is bad.
- Under in expense to last year or budget is good.
- Better in surplus to last year or budget is good.
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Signs on a Variance Column
Comparing Year Variances:
For asset, equity, and revenue accounts, as well as net gain loss, signs show a positive for an increase, negative for a decrease.
For liability and expense accounts, signs show a negative for an increase, positive for a decrease.
Account Type | This Yr | Last Yr | $ Var | % Var | Increase shows as | Decrease shows as |
Asset | 2,100 | 2,000 | 100 | 5 | Positive | Negative |
Liability | 1,100 | 850 | -250 | -23 | Negative | Positive |
Equity | 1,200 | 1,050 | 150 | 14 | Positive | Negative |
Revenue | 6,700 | 6,000 | 700 | 12 | Positive | Negative |
Expense | 5,000 | 4,800 | -200 | -4 | Negative | Positive |
Net Gain/Loss | 15,650 | 15,150 | 500 | 3 | Positive | Negative |
Actual to Budget Variances for the same year:
For asset, equity, and revenue accounts, as well as net gain loss, signs show a positive when actual is over budget and negative when actual is under budget.
For liability and expense accounts, signs show a negative when actual are over budget, positive when actual is under budget.
Account Type | Actual | Budget | $ Var | % Var | Over budget shows as | Under budget shows as |
Asset | 2,100 | 2,000 | 100 | 5 | Negative | Positive |
Liability | 1,100 | 850 | -250 | -23 | Positive | Negative |
Equity | 1,200 | 1,050 | 150 | 14 | Negative | Positive |
Revenue | 6,700 | 6,000 | 700 | 12 | Negative | Positive |
Expense | 5,000 | 4,800 | -200 | -4 | Positive | Negative |
Net Gain/Loss | 15,650 | 15,150 | 500 | 3 | Negative | Positive |
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Financial Statements – Sign control on total rows
By default financial statements try to figure out the correct sign to display on a total row. If a row on the report contains only revenue or only expense then it shows as a positive number.
If a row is made up of both revenue and expense accounts then it shows as a net. Therefore, if you have a report that shows a department or branch summary total, but consists of only expense accounts and no revenue accounts included in that total, the total would then show as a positive.
If you have this issue with the sign displaying wrong on a summary total, do the following: Add any revenue account to that department or branch; it may be marked as inactive. As long as there are both revenue and expense accounts in whatever is being summarized (branch, department, etc.), the summary total will display correctly.