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mcplprograms
Level 1

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

 
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Best answer December 10, 2018

Best Answers
qbteachmt
Level 15

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

It isn't a Real entry. It is your Net Income math value, for the first date of the new fiscal year.

The Net income from the date before gets closed to "Retained Earnings" which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

That net income is already seen in Equity for the current FY, so nothing really changed.

Whether that is "ok" or not, depends on the data. If your data is Right, then this is reflecting that status.

If you are new at using QB for a Not For Profit, I recommend the book Running QB for Not For Profits, by Kathy Ivens.

Please see my attached reporting image.

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7 Comments 7
qbteachmt
Level 15

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

It isn't a Real entry. It is your Net Income math value, for the first date of the new fiscal year.

The Net income from the date before gets closed to "Retained Earnings" which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

That net income is already seen in Equity for the current FY, so nothing really changed.

Whether that is "ok" or not, depends on the data. If your data is Right, then this is reflecting that status.

If you are new at using QB for a Not For Profit, I recommend the book Running QB for Not For Profits, by Kathy Ivens.

Please see my attached reporting image.

Rhuz
Level 1

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Hi can we close unrestricted net assets to fund balance? How can we eliminate this account?

Jovychris_A
QuickBooks Team

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Hello there, @Rhuz. You can check your Chart of Accounts (COA) to see what transactions are associated with the account when you close this account.

 

Besides, Unrestricted Net Asset is your net income for the first date of the new fiscal year in QuickBooks. The net income from the date before gets closed to Retained Earnings which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

 

Also, I suggest consulting your accountant so they can guide you on how to deal with Unrestricted Net Assets whether to remove the account or not.

 

Check this article to learn more about the chart of accounts in QuickBooks: Understand the chart of accounts in QuickBooks.

 

You can comment here if you have other concerns about managing your accounts in COA. I'm always around to help. Stay safe, and have a nice day ahead!

Rhuz
Level 1

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Hi Jovy, follow up question will this account automatically close to Retained earnings? When and how? or Can we close it using a Journal entry?. Thank you! for replying.

ShiellaGraceA
QuickBooks Team

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Thanks for getting back to us, @Rhuz.

 

I'll share some information about your follow-up question. As mention by our Allstar @qbteachmt above, Unrestricted Net Assets isn't a real entry as this is your math for the first date of the new fiscal year. That said, you can close this account via journal entry. You'll see the net income in the Equity account for the current Fiscal Year.

 

To create a journal, just go to +New and then Journal entry. Reach out to your account for proper recording of the accounts.

 

Want more details? Check out these articles below.

 

 

In case you need help with other banking tasks, feel free to browse this link to go to the page: Find help with bank feeds and reconciling accounts.

 

Don't hesitate to reply anytime if you still have questions or concerns about retained earnings account. I'll be around for you. Take care and have a good one.

elcoffice
Level 1

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

So I have the same issue ... what happens to this value ... the balance statements from 2021 only had Opening Balance Equity and Net Income which now in 2022 is now has Opening Balance Equity, Unrestricted Net Assets and Net Income.  2021 was the first year of this set of books.

 

This Unrestricted Net Assets is the Net Income from 2021 Dec 31, 2021 ... is there anything I need to do with this figure or does it carry throughout the whole year so long as there is not a negative net income??  Thanks  Sylvia-Linda

Charies_M
Moderator

QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Thanks for sharing your concern in this thread, elcoffice.

 

You can create a Journal Entry to help correct the balances. Please know that journal entries are the last report for recording transactions. I'd recommend consulting with your accountant before doing so. They can provide guidance on which accounts to use while making sure your books are accurate. You can also find an account by clicking on this link: Find an accountant.

 

You can follow ShiellaGraceA's steps on how to create a Journal Entry. Also, I'm sharing this good reference to learn more about creating JE's: Create a journal entry in QuickBooks Desktop for Windows or Mac.

 

If you wish to review the entries, you can do so by going to the bottom pane of the Make General Journal Entries window.

 

By default, only entries from the last month are displayed. To change or expand the list of entries, click from the List of Selected General Journal Entries drop-down list and select which period.

 

If there's anything else you need help with, just let me know. I'm always happy to assist. Stay safe and have a great day ahead.

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