I am trying to figure out how I can add income/expenses to my client's books without affecting the B/S and I/S as they stand. My problem is, once I've entered the B/S balances, anytime I add a journal entry for an income(donation)/expense item, it changes the final balances. I want to be able to add all income/expense accounts without affecting the balance sheet balances.
Background: I recently inherited a religious organization's accounting and I have a Balance sheet and an Income Statement but I don't have many of the transactions because they were using an outdated system form the 90s and their past accountant left the church. I have the B/S and I/S up to 9/30/2018 so I want to enter all of the information in and continue from there.
It would take a miracle to be able to enter historical data without affecting current B/S. I am fresh out.
Start with all the historical you want prior to 9/30/18. Then adjust accounts to match the B/S in hand. In a normal for profit this would be Opening Balance Equity. It will be something entirely different but similar for you.
And dont use journal entries for income or expense except as a last resort. You lose name tracking and it bypasses cash vs accrual
Thanks for the suggestion@john-pero . I am considering entering the amounts and having them offset by an equity account but I fear that may cause the books to get messy.
What other method do you suggest instead of using journal entries?
Thanks for getting back to the QuickBooks Community, @ara1181.
Allow me to step in and help provide some additional information about entering historical transaction in QBO.
Our Established Community Backer provided you the exact information. The books in QBO is continuous, once you enter the historical transactions, it will affect your Balance Sheet and Income Statement balances.
If you offset the opening balance equity account, I would suggest to consult an accountant about the process to ensure your books are accurate.
For future reference, you may want to check these articles:
Please know that you're always welcome to post if you have any other questions about entering historical transactions. Wishing you and your business continued success.