What is the journal entry for Accumulated Amortization as an opening balance? How about for Amortization Expense opening balance? Is it negative?

How was this asset aquired?  Have you already recorded the purchase of the asset?  If so, you would /should have Debited the Asset account, and Credited the Bank account.  Amortization is recorded by setting up a sub or contra-account under your Main asset called Accumulated Amortization.  To record the amortization, you would Debit the Amortization Expense account (which shows up on the P & L or income statement) and Credit the Accumulated Amortization contra account (which shows up on the balance sheet) for the asset in question.

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@Anonymous wrote:

Hello,

 

Thanks for reaching out. These are very interesting questions and I suggest you connect with your accountant to get the most accurate answers for your business needs. With QuickBooks Online, you can give your accountant access to your account in a few easy steps. To do so, check this community article on how to manage an accountant user in QuickBooks Online.

 

If you don't have an accountant, you can find a certified ProAdvisor in your area through this link:

 

Let me know if you have any other questions.

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thanks for your helpful response. All questions answered

I am having a similar issue. I am transferring to online from a very old version of QB and need to enter all my opening balances for the categories I had in that system. Ie Computer Equipment with sub categories of Cost and Accumulated depreciation.  The numbers end up opposite of what they are in my old system and I am not sure why.

Hello @Tammy L ,

My recommendation would be to not use the opening balance in the account set-up in QBO.   There are some account types where if you follow QBO's directions, you will end up with balances on the wrong side of the equation.  This has been brought to their attention - not sure if or when it will be fixed.

Rather, set up your opening balances by posting directly to a journal entry.  If you look at my post a ways up in this thread I have given correct instructions of where you balances should be debit and credit wise.  If you have any more questions, I'd be happy to try and help.  Good luck!

My amortization expense account is being pulled into the asset account. Such that when I book amortization

Dr. Amort expense 

Cr. Accum Amort

I get the expense reducing the asset and going into accum amort - so the asset is hit twice and no expense to the p&L. What is wrong?  The expense account clearly says "expense".

Hi donnaguavy,

Thanks for joining us here. I know how important it is to make sure your books are accurate. When it comes to journal entries and making sure everything's lining up correctly, your accountant is an incredible resource. For that matter, I'd encourage you to reach out to an accountant to ensure accuracy across various accounts. You can easily invite an accountant to your books or find one in your area. Just head to the My Accountant menu to get started, then select Find a pro to help.

Don't hesitate to reach out if you have any other questions.

Great. I used journal entry at the end of fiscal year to recorded this transaction. However, I could not see this amortization expense shows  up in P&L report, only on balance sheet. I am not sure where do I have made error? Could you please advise me?

Hello @donnaguavy ,

Were you ever able to get this sorted out?  I have tried to duplicate what you are saying has happened, but when I debit my Depreciation Expense account, it goes to the right place and does end up on the P & L so I'm not sure what could be going on in the situation you describe.

The only way I could see this happening is if your Depreciation/Ammortization expense account is not actually an "expense" account in the account set-up.  Ensure your Account Type is Expenses and ensure your Detail type is Office/General Administrative Expenses.  Hope that helps.

I am setting up QB desktop and need to know if I need to enter the opening balances for accumulated depreciation as a negative or if the system will automatically assign it? Also same question for the outstanding loans

Hi CW1982. Glad to have you chime in on this thread. Recording your transactions the right way is a good exercise for keeping your books accurate. To ensure accuracy in your books, I recommend contacting an accounting professional to get expert advice. Doing this will help prevent any future discrepancies in your books. You can also reach out to accounting professionals on our site using this link here. Otherwise, I encourage you to check out this helpful article here that shows you how to enter an opening balance in QB Desktop. I'll also leave this question here so other accounting professional members can chime in and share their expert advice. Let me know if you have other questions, I'm here to assist.