A: There are serval scenarios and different ways of handling this situation.
1. If
the BSNI amount does not match the P&L Net
Income, and the Balance Sheet is in balance:
a. I would put more trust in the BSNI. The Balance Sheet will be out of balance if the BSNI is wrong because the BSNI is a auto calculation from system that is based on the account type (P = Profit and Loss). It did not come from any P&L statement. P&L Net Income came from the Layout file; the user may forget to add new Expenses or Revenue accounts associated to the Layout file. It will cause the Net Income to be incorrect.
b. Example: P&L Net Income > BSNI --- In most situations, this is due to a new expense account that is missing on the P&L statement layout.
c. Investigation: You may run Trial Balance and compare with P&L statement. Hopefully, it's just one missing expense account when you check the variance.
2. If the BSNI amount matches the P&L Net Income but the Balance Sheet out of balance.
a. The majority of situations occur when the Balance Sheet is missing an account in the layout file or the wrong Sub-Total level is assigned on the layout file.
b. Investigation: You may run Trial Balance and compare with the Balance Sheet. Hopefully, it's just one account that's missing when you check the variance.
3. If the BSNI amount does not match the P&L Net Income but Balance Sheet out of balance.
a. This would be a complicated situation. It might come as a result of multiple errors.
b. Suggestions:
i. Run Trial Balance with range of P&L accounts only to figure out correct Net Income.
ii. Check to see if the P&L Account flag is set to “P” instead of “B” on the GL Account file list.
iii. Check the layout file for missing accounts.