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JTalMidwest
Level 1

Starting to track mutual funds in QBO for my nonprofit. Why is the starting balance reflected as a negative?

I am trying to set up three separate mutual fund investment accounts for tracking in QBO. I've read many posts that give different suggestions on the account type and how to manage this. We don't do much with the accounts, just letting them grow as best we can. (1) What is the correct way to set this up? Bank account? Equity account? (2) I already set it up with an opening balance, but that is now showing as a negative. Is this based on how I originally set it up? Is there a way/need to fix this? (3) How do I record a change in the balance month-to-month? For instance, one account is down $3K. What is the best way to record this?

 

Thanks!!

1 Comment 1
QBsguru
Level 7

Starting to track mutual funds in QBO for my nonprofit. Why is the starting balance reflected as a negative?

Investment accounts are usually set up as a current asset.  If you want to track the balances, you need to set up an other income account for unrealized gains/ losses.  Gains and losses are not realized until you sell or cash out your account.  

 

Delete the original transaction you set up.  It is likely going into the opening balance equity account which is incorrect.  It needs to go into retained earnings or if you are a nonprofit....unrestricted net assets.

 

Record a journal entry each month to reflect the new balance and the other side of the entry is the unrealized gain/loss account

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