Final Step Reconciling Chart of Acctounts

crisstax · ‎May 24, 2022

After I reconcile my bank account and the credit card, I still see some balances on the chart of accounts. I'm guessing most accounts here should be reconciled and therefore should show as zero?

Rainflurry · ‎May 30, 2022

@crisstax

When you are a sole proprietorship, everything closes out to an account called "Owner's Capital" at year-end. Based on your screenshot, you may have a couple redundant account - owner's contributions and owner's investment can be combined into the owner's contributions account. Owner's draw, owner's draw - personal use and owner's pay can be combined into owner's draw. Maybe you keep those for a reason but the main idea is you want to be able to track the money you put into the business (contributions), the money you take out (draws) and the money you leave in the business (capital). At year-end close out owner's contributions and owner's draw to the owner's capital account.

As far as account balances showing in the COA, those balances are your current balances irrespective of whether you have reconciled those accounts. They will only be zero if the account balance is zero as of the day you are looking at your COA.

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Carneil_C · ‎May 24, 2022

Hello there, @crisstax. Thank you for posting your concern and adding an additional screenshot.

I’m here to lend a hand in fixing these account balances so you’ll be able to finish reconciling your accounts in QuickBooks Online (QBO).

To sort this out, we may review those accounts and ensure that the beginning and the ending balances were accurate. To check the ending balance you’ve entered, let me guide you on how:

Go to the Reconciliation window, click on the Edit info.
Then, review the Ending balance and Ending date.
Check your bank statement. Make edits as needed.
When you're done, select Save.

Alternatively, we can run a Past Reconciliation report to see if there were changes made to them.

It would also be best to seek professional advice from your accountant about the best process for your books.

For more details about this process, please see this article: Fix issues at the end of a reconciliation in QuickBooks Online.

On the other hand, I'd also recommend checking out this great reference, which talks about fixing issues for accounts you've reconciled in the past in QuickBooks Online. This link provides complete steps for handling balance issues: Learn what to review so you can start reconciling.

Please feel free to get in touch with me here for any additional questions about reconciling your accounts in QBO. The Community always has your back. Have a great day!

crisstax · ‎May 29, 2022

My question is more like this: do I need to clear all my balances from the chart of accounts unless I have a balance at the end of the year on them as in the case of the bank accounts? For example, the guidance you gave me is to reconcile an account and I already understand how to do that. I have balances in an account called owner's investment Equity, (I'm attaching another file here) and another called Owner's Pay & Personal Equity. Let's go by parts I am unsure what these last account is for other than for Pay and to fix my entries when I make a mistake and pay with the business credit card instead of the personal credit card.

First, could you tell me if that entry is correct? I guess I am trying to zero out the balances here somehow.

Second, about my initial question, should those two accounts previously mentioned be zeroed out before I start entries for the next business cycle?

Thank you for all your input and effort in helping me in advance!

Rainflurry · ‎May 30, 2022

@crisstax

When you are a sole proprietorship, everything closes out to an account called "Owner's Capital" at year-end. Based on your screenshot, you may have a couple redundant account - owner's contributions and owner's investment can be combined into the owner's contributions account. Owner's draw, owner's draw - personal use and owner's pay can be combined into owner's draw. Maybe you keep those for a reason but the main idea is you want to be able to track the money you put into the business (contributions), the money you take out (draws) and the money you leave in the business (capital). At year-end close out owner's contributions and owner's draw to the owner's capital account.

As far as account balances showing in the COA, those balances are your current balances irrespective of whether you have reconciled those accounts. They will only be zero if the account balance is zero as of the day you are looking at your COA.

AlcaeusF · ‎June 13, 2022

Hello Rainflurry,

I have reviewed the solution you’ve shared and it's correct and accurate. Thank you for sharing your inputs to help address the issue.

We love to see members supporting one another! Have a great day.

crisstax · ‎March 03, 2023

Thank you so much! I will make the changes as you advice.

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Final Step Reconciling Chart of Acctounts