How to Enter Starting Owners Equity?

Hi there, Capital Grey. 

I'm here to guide you on how to set up and process an owner's draw account in QuickBooks Desktop. 

Here's how:

1. Go to the List menu bar at the top of the window.
2. Select Chart of Accounts.
3. At the bottom left choose Account then select New.
4. Click Equity and clickContinue.
5. Enter the account name (Owner's Draw is recommended) and description.
6. Click Save & Close.

Your account will be made and set up now. You can record the owner’s draw in QuickBooks using this account.

For additional reference, you may want to check this article to understand the QuickBooks Chart of Accounts. 

Don't hesitate to let me know if you have follow-up questions about your owner's draw account. I'm glad to assist. Have a nice day ahead. 

This is Exactly What i had said i had found online, and wont work. This money is being deposited into my bank account. so while i can make The Equity Account (Though one already exists By Default??) i Also need to have that money appear to my Bank account Balance. or should i just set my starting balance as that same Amount thats put into an equity account?

Hello there, @@Capital Grey.

I want to ensure you're able to record the starting equity balance seamlessly. Here's how you can do it:

1. Select the  Banking menu then click on Make Deposits.
2. Choose Cancel to deposit the investment check alone if QuickBooks shows the Payments to Deposit window.
3. Select the bank account where you're depositing the money from the Make Deposits window.
4. Fill in the name of the person who gave you the money and the amount of the investment in the detail section.
5. Select the right equity account in the “From account” list.

For future reference, you can also learn more about the Chart of Accounts in QuickBooks.

Just reply back to the thread if you have other questions about this or with QuickBooks. I'm always willing to back you up. Take care always.

If you are setting up quickbooks and the business is already running, how do you enter history owner equity without having it be a bank transaction or zeroing itself out?

Thanks for joining this thread, @xtian1,

Let me guide you on how to enter the owner's equity.  When creating an account in QuickBooks Desktop (QBDT), you have to choose a start date for tracking transactions and enter the actual balance of your real-life account. If you're unable to input the account's opening balance, you can create a journal entry to record it. This method can be used for an unreconciled account only.

Here's how: 

Step 1: Make sure the account doesn't have an opening balance.
 

1. In the toolbar, go to the Lists, and select Chart of Accounts.
2. Find the account and double-click to view transactions.
3. Locate for an opening balance entry. In the Payee Account column, it should say Opening Balance Equity, and in the Memo column, it should say Opening Balance.
   
   

If there's no opening balance, list down the date and amount of the oldest transaction in the account.

Step 2: Create a journal entry.
 

1. Go to the Company, and select Make General Journal Entries.
2. The date you enter must be earlier than the account's oldest transaction. This is the start date for the balance.
3. On the first row of the Account column, choose an account you want to enter the opening balance.
4. Add a note in the Description field to know what the journal entry is for.
5. On the second row of the Account column, choose the Opening Balance Equity.
6. Using your bank statements, input the account's balance as of the date you chose for the opening balance. Enter the debits and credits to make things accurate. (Note: Input the debits and credits by the kind of account you choose in the first row.)

• Asset (savings and checking) and expense accounts: Enter the opening balance in the Debit column on the first row. Then, enter the same amount in the Credit column on the second row.
• Liability, equity, and income accounts: Enter the opening balance in the Credit column on the first row. Then, enter the same amount in the Debit column on the second row.
• Accounts Payable: On the first row in the Name field, select the vendor you owe money. Enter the opening balance as a credit to increase the balance. Or enter the opening balance as a debit to decrease the balance. Then, enter the same amount in the opposite column on the second row.
• Accounts Receivable: On the first row in the Name field, select the customers who owe you money. Enter the opening balance as a debit if you want to increase the balance. Or enter the opening balance as a credit if you want to decrease the balance. Then, enter the same amount in the opposite column on the second row.
  7. When you're ready, select Save & Close.
   

Step 3: Mark the journal entry as reconciled.

The journal entry needs to be reconciled even though the account hasn't been settled yet. 

To prevents it from showing up on a future reconciliation:
 

1. Go to Banking, and select Reconcile.
2. Select the account in the Account drop-down.
3. Enter the statement date and ending balance that matches your Journal Entry.
4. Select Continue.
5. In Deposits and Other Credits, select the Journal Entry.
6. Select Reconcile Now.
   
   

You can refer to this article if you want to learn more about fixing balance issues in QBDT: Fix beginning balance issues in QuickBooks Desktop.

To ensure the accuracy of the account, it would be best to seek professional advice from your accountant. If you don't have an accountant, we can help you find one.

I'll also add an article you can use for the future if you happen to encounter issues while reconciling your account: Fix issues when you're reconciling in QuickBooks Desktop.

Please don't hesitate to leave a reply if you require further assistance with your account's opening balance. I'm here to help anytime. Have a good one.