diff --git a/erpnext/patches.txt b/erpnext/patches.txt
index b7fc5e77681..1a903de743b 100644
--- a/erpnext/patches.txt
+++ b/erpnext/patches.txt
@@ -68,3 +68,4 @@ erpnext.patches.v4_1.set_outgoing_email_footer
 erpnext.patches.v4_1.fix_jv_remarks
 erpnext.patches.v4_1.fix_sales_order_delivered_status
 erpnext.patches.v4_1.fix_delivery_and_billing_status
+execute:frappe.db.sql("update `tabAccount` set root_type='Liability' where root_type='Income' and report_type='Balance Sheet'")
\ No newline at end of file
diff --git a/erpnext/setup/doctype/company/company.py b/erpnext/setup/doctype/company/company.py
index d24c7e78e2d..f8e043a9274 100644
--- a/erpnext/setup/doctype/company/company.py
+++ b/erpnext/setup/doctype/company/company.py
@@ -241,7 +241,7 @@ class Company(Document):
 					[_('Sales'),_('Direct Income'),'Ledger','Income Account','Profit and Loss', None, 'Income'],
 					[_('Service'),_('Direct Income'),'Ledger','Income Account','Profit and Loss', None, 'Income'],
 				[_('Indirect Income'),_('Income'),'Group','Income Account','Profit and Loss', None, 'Income'],
-			[_('Source of Funds (Liabilities)'), None,'Group', None,'Balance Sheet', None, 'Income'],
+			[_('Source of Funds (Liabilities)'), None,'Group', None,'Balance Sheet', None, 'Liability'],
 				[_('Capital Account'),_('Source of Funds (Liabilities)'),'Group', None,'Balance Sheet', None, 'Liability'],
 					[_('Reserves and Surplus'),_('Capital Account'),'Ledger', None,'Balance Sheet', None, 'Liability'],
 					[_('Shareholders Funds'),_('Capital Account'),'Ledger', None,'Balance Sheet', None, 'Liability'],