Short answer
Why does retained earnings create an opening balance sheet mismatch?
Retained earnings sits between the opening balance sheet and forecast profit. If it includes current-period profit twice, uses the wrong sign, or contains prior adjustments, the opening BS can fail before any forecast rule is added.
Review
What to Check
- Opening retained earnings: confirm it is the balance at the forecast start, not a year-to-date subtotal.
- Current profit: avoid including current-period income both in retained earnings and in forecast profit.
- Dividends and adjustments: separate dividends, prior-period corrections, and owner distributions from the opening balance.
- Equity sign: check whether equity is imported as a credit balance or as a negative balance.
- Starting month: make sure the trial balance date matches the opening BS date used by the forecast.
Next