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tishfiamingo
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

Solved
Best answer December 10, 2018

Best Answers
SkinnyRaven
Level 8

How do I close out end of year.

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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16 Comments
SkinnyRaven
Level 8

How do I close out end of year.

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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ann-notley
Level 1

How do I close out end of year.

Thank you.  I have been going round in circles trying to find an "end of year function".  QuickBooks seems to make this very easy..
ljohnstone790
Level 2

How do I close out end of year.

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

ljohnstone790
Level 2

How do I close out end of year.

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

qbteachmt
Level 15

How do I close out end of year.

@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.

Wendie2018
Level 1

How do I close out end of year.

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

MirriamM
Moderator

How do I close out end of year.

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.

PatMBurk
Level 1

How do I close out end of year.

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?

RKB7
Level 1

How do I close out end of year.

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.

 

KhimG
QuickBooks Team

How do I close out end of year.

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!

DDriskell
Level 2

How do I close out end of year.

I understand the automatic entries for year end that QB makes, but I want to close the prior year so that no changes can be made by more or anyone else.  Is there a way to do that in QB Desktop Enterprise?  Thank you

RenjolynC
QuickBooks Team

How do I close out end of year.

We do have a way where you can close the books to lock transactions for the past periods, DDriskell.

 

Closing your books is an important step to make sure that everything stays the way you want it to for the prior years. You can follow these steps on how to do it: 

  1. Go to Edit > Preferences > Accounting.
  2. Select the Company Preferences tab.
  3. Under Closing date, click the Set Date/Password button.
  4. In the Set Closing Date and Password window, select the Closing Date.
  5. Enter the Date Password, and confirm it.
  6. Click OK once done. 

Here's a sample screenshot for a visual guide:

 

You can also check this article for more information: Close your books in QuickBooks Desktop.

 

Reach out to me if you need anything else. I'll be around to help you some more. Thanks.

EH67
Level 1

How do I close out end of year.

Hello,

 

Do you know if there is away to change the target Retained Earnings account?

 

In our case we have created a new AAA account after a change in ownership and would like the Net Income to show up there.

 

KlentB
QuickBooks Team

How do I close out end of year.

Thanks for reaching out to us, EH67.

 

I'm here to share insights on how the Retained Earnings account works.

 

At the end of the year, QuickBooks automatically move the money/pr to Retained Earnings account via electronic swap. This account will show the total of your company's income and expenses from all previous years. By default, we're unable to changes its target account.

 

If you need to show the net income to your custom (AAA) account, you'll have to create a journal entry to move the balances. Take note that this process can be tricky if you're not familiar with accounting. You may need to consult your accountant to be guided in transferring the amounts.

 

In addition, here are some resources that you read to learn how to prevent changes to past books in QuickBooks Desktop:

 

Drop me a comment below if you need more help in managing your books and reports. I'd be more than happy to assist you again.

jac88
Level 1

How do I close out end of year.

we recently changed from qb 2018 to qb online

how do i close the year 2020 ?

and can I enter for 2021 with out closing

AileneA
QuickBooks Team

How do I close out end of year.

Hello, jac88. 

 

Thank you for choosing QuickBooks as your accounting software. Closing your books is super easy, though it's not necessarily as QuickBooks will automatically create adjustments in the coming year. Your program already puts the value from the Net Income as of the final date on the Balance Sheet and at the bottom of the Profit and Loss. 

 

You can learn more information about closing your books in QBDT in this article: Close your books in QuickBooks Desktop

 

If there's anything else I can help you with, please let me know. I'd be happy to help. Stay safe!

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