Correcting to zero - QBO balances for unused bank and CC accounts.

eager2learn · ‎September 19, 2024

I have some 2023 bank and CC that have not and will not be used in 2024, however they have ending balances from 2023. How do I correct them to zero in 2024 without their ending balances being reported on the 2024 financial statements since they were reported/included in the 2023 financial statements? Please provide me with a step-by-step guide if possible. Thank you very much.

Rasa-LilaM · ‎September 20, 2024

Accurate bank and credit card balances are essential for proper financial reporting and cash flow management, eager2learn. We can clear your account balances by using the Transfer option.

As mentioned earlier by@MariaSoledadG, creating a journal entry will clear the balance. You can utilize the Transfer function to move money between accounts. This is an effective way to move funds between checking and savings or to settle a credit card balance.

Furthermore, you can move accounts in QuickBooks Online (QBO) through any of these methods:

Record a new transfer
Record a transfer by check
Match imported bank transactions (if you're connected to online banking)
Make a journal entry (Check with your accountant first)

Before you make a transfer, it's a good idea to contact your accountant or tax expert. They can help make sure these transactions are recorded correctly in the right accounts. Visit this link to find an expert near you: Find a ProAdvisor.

If you select the Transfer method to record the entry, I’m ready to guide you through each step. Here's how:

Navigate to the New menu in the upper right of your company and select Transfer under Other.
On the entry screen, click the Transfer Funds From drop-down and choose the account the money is coming from.
From the Transfer Funds To dropdown list, select the account that the money is going to.
In the Transfer Amount field, input the amount being moved.
Enter the correct date in the Date field.
Type a description of the transfer in the Memo field (optional).
Once done, click the Save and close or Save and new button.

Browse this article to learn more about recording a transfer via check, journal entry, or matching transactions: Transfer funds between accounts.

If you need help moving money between companies in QBO, click this link for guidance: Transfer funds between companies in QuickBooks Online.

You can generate reports to see a clear and accurate picture of your financial status. Click on each link to see the full details:

Also, explore QuickBooks Live Expert Assisted for personalized guidance in categorizing transactions, recording transfers, or creating journal entries to maintain accurate bookkeeping. They will share their best practices for managing your accounts, ensuring your financial records are correct and up-to-date.

Drop a comment below if you still have additional questions or concerns about clearing your balances and managing your transactions. The Community is always available to lend a helping hand.

View solution in original post

MariaSoledadG · ‎September 19, 2024

I have a way how to fix the balances for your 2023 transactions to correct the current year report, Eager2learn.

A journal entry will show the complete story of each transaction in a single entry. This helps you locate and prevent errors, provides a record of all transactions, and makes it easy to locate mistakes in the ledger.

You can create a journal entry to zero out the bank balance. To do so, follow the steps outlined below:

Click + New.
Select Journal entry.
On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Select Save and new or Save and close.

At the same time, you can set the unused bank or credit card account to inactive if you will no longer use this moving forward. However, I still recommend reaching out to your accountant's advice to guide you on what accounts you'll use with your journal entry and if there are effects when you make your unused account inactive. They are more familiar when it comes to analytical and problem-solving skills in the field of accounting.

On the other hand, when you say financial statement, are you referring to the Profit and Loss report? If so, to ensure you'll get accurate figures for the year, you'll have to make sure to customize them when running the report so it will only show the entries or data you need most.

Moreover, QuickBooks offers different kinds of reports that you can use and fit your business needs. Check this article that will show you how you can save the current customization settings to save time so you don't have to customize this each time you run this report: Memorize Reports in QuickBooks Online.

Let us know if you have any other questions about your books. I'm always here if you need further help with correcting your unused bank and credit card accounts. Take care and have a great rest of the day!

eager2learn · ‎September 20, 2024

Thank you MariaSoledadG.

I am the bookkeeper 🫣 for the client scenario described. I am still learning.

For clarification, these are balance sheet accounts for personal bank and CC's used in 2023 discovered during a massive cleanup. I advised that they no longer to be used in 2024.

I am not comfortable with journal entries, and ask if I can use transfers instead, with clear descriptions you suggest?

Also, if there are any accountants on this forum, can you suggest which accounts to move these ending balances to? My thoughts are to transfer them to SH equity account if this is the correct thing to do in thise case scenario.

I thank you for your kindness as I learn.

eager2learn · ‎September 20, 2024