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Level 1

How do I close out end of year.

 I am new to Quick Books and have entered last years trail balance.  Now I need to close out the year and can't find out where to do that

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Best answer 12-10-2018

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Level 8

Year-end adjustments QuickBooks makes automatically Quick...

Year-end adjustments QuickBooks makes automatically

QuickBooks performs certain year-end adjustments, based on your fiscal year start month.

  • QuickBooks adjusts your income and expense accounts at year-end to zero them out. Therefore, you start your new fiscal year with a zero net income.

  • QuickBooks makes an adjusting entry to your net income. For example, if your profit for the year was $12,000, on the last day of your fiscal year the equity section of your Balance Sheet would show a line for net income of $12,000.

  • On the first day of the new fiscal year, QuickBooks increases your Retained Earnings equity account by the previous year's net income ($12,000 in this example) and decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.

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Level 8

Year-end adjustments QuickBooks makes automatically Quick...

Year-end adjustments QuickBooks makes automatically

QuickBooks performs certain year-end adjustments, based on your fiscal year start month.

  • QuickBooks adjusts your income and expense accounts at year-end to zero them out. Therefore, you start your new fiscal year with a zero net income.

  • QuickBooks makes an adjusting entry to your net income. For example, if your profit for the year was $12,000, on the last day of your fiscal year the equity section of your Balance Sheet would show a line for net income of $12,000.

  • On the first day of the new fiscal year, QuickBooks increases your Retained Earnings equity account by the previous year's net income ($12,000 in this example) and decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.

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Level 1

Thank you.  I have been going round in circles trying to...

Thank you.  I have been going round in circles trying to find an "end of year function".  QuickBooks seems to make this very easy..
Level 1

Re: Year-end adjustments QuickBooks makes automatically Quick...

Do I have to finishing 2018 completely before entering anything in new year?

Level 1

Re: Year-end adjustments QuickBooks makes automatically Quick...

I’m starting books from scratch now having to bring in bank files and going to enter one month at a time.  Also want to know if I can run 2019 Payroll but not finished 2018. Please help

Level 15

Re: Year-end adjustments QuickBooks makes automatically Quick...

@ljohnstone790

 

You don't have to Finish 2018 work, to still enter 2019. You cannot run Payroll out of sequence, or Reconcile out of sequence. For instance, when the tax return is done, maybe not until April, you typically have a few 2018 entries to be made.

 

"Bank Files" are not carrying Your date; that is the date the Bank processed it, not your spending date.

Level 1

Re: Year-end adjustments QuickBooks makes automatically Quick...

Hi,

I hope this reaches you. I have the same question closing out the books at year end. I understand what you said that QB automatically makes year end adjustments and closing entries such as net income, however, if I generate the balance sheet at year end, equity section shows a separate amount of retained earnings and the net income for the year. I am wondering if there is a way to close out the books where in when you generate the balance sheet after closing, there would be no net income line, instead only retained earnings which is the yearend balance including the net income. I hope it makes sense.

 

Thanks

Moderator

Re: Year-end adjustments QuickBooks makes automatically Quick...

Hello, Wendie2018,

 

Thanks for visiting the Intuit Community!

 

Let me help share additional information about the Balance Sheet report at year end in QuickBooks Desktop.

 

The Balance sheet report shows a financial snapshot of your company as of a specific date. The report calculates how much your business is worth (your business's equity) by subtracting all the money your company owes (liabilities) from everything it owns (assets). The total for equity includes your company's net income for the fiscal year to date.

 

This is the reason it will always have a net income at the bottom of the report to total all the Income gained from the previous period.

 

To know more about the reports in QuickBooks Desktop, you can read this article: https://quickbooks.intuit.com/community/Help-Articles/Understand-reports/m-p/202665.

 

In case you need tips and related articles in the future about the "How Do I" steps in QuickBooks Desktop, visit our QuickBooks Community help website for reference: QBDT Self-help.

 

If you have any other questions concerning QuickBooks Desktop, please let me know. I'd be happy to answer it for you. Take care.

Level 1

Re: Year-end adjustments QuickBooks makes automatically Quick...

I can see that QuickBooks posts Retained Earnings.  However, I still have an entry for Net Income.  How do I close out Net Income for the prior year?

Level 1

Re: Year-end adjustments QuickBooks makes automatically Quick...

What about a balance owed on a loan to an employee?  he has a balance of $1,000 but when Jan paycheck comes out, the loan balance says 0.  How do I get the balance back so he knows what he still owes?

the Balance goes to 0 in paychecks, but I want the loan balance to continue into the next year.

 

QuickBooks Team

Re: Year-end adjustments QuickBooks makes automatically Quick...

Thanks for joining the conversation, @RKB7.


Having the option to add a field for the balance owed by an employee on a paycheck is currently unavailable. You can only view the total taken out from their checks using the YTD column. 


Please see screenshots below for reference:

 


It’s indeed a great idea. Let me pass this along to the appropriate department and team members for consideration in the near future. 


To ensure that the system won’t continue to withdraw funds after the full amount is paid off, I recommend setting up an item limit. Here’s how:

  1. From the Lists menu, choose Payroll Item List.
  2. Look for the loan item and open it.
  3. Click Next until you reach the Default rate and limit window.
  4. Enter the loan amount.
  5. Once done, hit Finish.

 

 

 

 

Check out this article for more information: Edit a payroll item.


If you have any questions or clarifications, let me know by leaving a comment. I’m more than happy to help. Have a great day!

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