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I started my current year with a negative opening balance equity from prior year 2020. When I close current year 2021, since I have a profit will QB automatically adjust the 2022 opening balance equity to accomodate the difference or do I need to manually create a GJ to offset the balance.
For example:
2020 starting equity balance was ($10,000)
2021 Net Income $20,000
2022 starting equity balance now $10,000
or do I need a a GJ to reduce my 2021 income by $10,000 with the offset of the equity to net me a 2022 starting equity of $10,000
Solved! Go to Solution.
This is one of those maybe answers that QB is so famous for
If you have a retained earnings account in the chart of accounts, yes you need to use a journal entry, debit RE and credit equity
If there is not a retained earnings account, it means QB is using that account as equity and will post to it automatically. This only happens for those who have elected sole proprietor
This is one of those maybe answers that QB is so famous for
If you have a retained earnings account in the chart of accounts, yes you need to use a journal entry, debit RE and credit equity
If there is not a retained earnings account, it means QB is using that account as equity and will post to it automatically. This only happens for those who have elected sole proprietor
I do have a retained earnings account. So at EOY I'll do a GJ to move all my earnings to equity.
Thanks
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