What are natural accounts?
When you initially setup your General Ledger, U.A. prompts you for a ‘Current Earnings’ and a ‘Retained Earnings’ account. These accounts are both of the Equity type. It is important to properly establish these accounts before you create, validate, and post journals. The U.A. General Ledger recognizes the concept of Natural Accounts. A Natural Account is the root account. First, let’s clarify what this means. Most companies have an Accounts Receivable, holding the fluctuating value of what a customer base owes them. To create this GL Account, you will first create a Natural Account called Accounts Receivable, and assign it a value of, say, 1200. This 1200 is the Natural Account. All other portions of the final account number are simply a further breakdown of Accounts Receivable, but are none the less Accounts Receivable entries. Let’s suppose your company has an office in Boston, Seattle, and Dallas. You have created these Company Structure elements, and assigned each a value of 100, 2
