cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

How to create opening balance for a liabilities account

When a new client opens an account at my business they pay a deposit which I hold until the account is closed and the deposit is refunded back to them.

 

I created a "current liabilities - client trust account" called "Client Deposits". I then created a Service in Products & Services titled "Client Deposits" and set the income account as the "Client Deposits" liability account. Whenever I receive a deposit I create a Sales Receipt with a Client Deposit service item and match the sales receipt to the bank transaction. This all works nicely and the deposit goes into the Client Deposits liability account. 

 

However I want to add an opening equity balance entry for the Client Deposits liability account as was never given the option when creating it. And I have a sum of client deposits held in my bank account from before I started using Quickbooks Online. How do I create this opening balance? I have previously been successful editing the opening balance for other accounts in the past. Though I can't seem to find out how to do it in this instance.

 

Do I need to create a journal entry? If so could someone talk me through the steps please?

 

Or do I need to create a Sales Receipt for the bulk of deposits I had on the account before I started using Quickbooks Online? The only problem I foresee with that is there is no banking transaction to match this sales receipt to so it would leave an unfinished paper trail. 

 

Thanks

Nick

Solved
Best answer 04-30-2018

Accepted Solutions
Moderator

Re: How to create opening balance for a liabilities account

Thanks for visiting the Community, Nick.

 

The things you mentioned above are entirely correct. And I commend you for doing a great job.

 

We can create a journal entry for the Client Deposits liability account's opening balance. Let me show you how:

 

1. At the top menu, click the Create menu (+) and select Journal Entry.

2. Enter the Journal date and the Journal no..

3. Credit the Client Deposits account.

4. Debit the Opening Balance Equity account.

5. Click Save and close.

 

You can also browse this article for more information: Record Opening Balance.

 

Though, I'd recommend consulting your accountant about this. They know what's best for you and your books.

 

If you need anything else, please let me know.

View solution in original post

3 REPLIES 3
Moderator

Re: How to create opening balance for a liabilities account

Thanks for visiting the Community, Nick.

 

The things you mentioned above are entirely correct. And I commend you for doing a great job.

 

We can create a journal entry for the Client Deposits liability account's opening balance. Let me show you how:

 

1. At the top menu, click the Create menu (+) and select Journal Entry.

2. Enter the Journal date and the Journal no..

3. Credit the Client Deposits account.

4. Debit the Opening Balance Equity account.

5. Click Save and close.

 

You can also browse this article for more information: Record Opening Balance.

 

Though, I'd recommend consulting your accountant about this. They know what's best for you and your books.

 

If you need anything else, please let me know.

View solution in original post

Level 1

Re: How to create opening balance for a liabilities account

All done now. I was half way there but didn't know which account to debit to balance the journal entry. A big thank you. 

Anonymous
Not applicable

Re: How to create opening balance for a liabilities account

You're welcome @nick1988, let us know if you need anything further