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Cash Flow FAQ: Starting Cash not Equal to Last Month Ending Cash


Why is the Starting Cash not equal to the previous months Ending Cash on the Cash Flow Statement?


This typically occurs when there is an off-cycle entry made directly to Retained Earnings in the accounting system. The Cash Flow in Jirav is indirectly calculated from the Income Statement and Balance Sheet. The change in Retained Earnings is assumed to be reflected through Net Income, as a result any change to the Retained Earnings balance that is not equal to the previous year end Net Income, is ignored. 

Updating the accounting system to move the off-cycle change in Retained Earnings to a different Equity account, e.g., Retained Earnings - Adjustment, will correct the behavior.