Negative Retained Earnings in an S Corp - How to create a journal entry to zero out and not carry over

Let me share some information about negative earnings and rote you to the right support, confusedallthetime.

The retained earnings are your company’s accumulated and undistributed profits over the years. At the end of each fiscal year, the negative/positive balance for your business is transferred to that account.

This means the transfer brings your business' balance back to zero for the new fiscal year. Then, it helps you keep track of how your business accumulates or loses capital.

To create a journal entry to zero out the negative retained earnings amount, I'd suggest consulting an accounting professional to get the best legal and accounting advice for your business type.

Once you have the information you need, just follow the steps below to create the journal entry: 

1. Go to the Company menu.
2. Select Make General Journal Entries.
3. Choose the transaction date in the Date field. Then, enter the General Journal Entry details.
4. Press Save & Close.

You can also check this article to know more about the process: Record a Journal Entry.

I've got a link here that provides you with articles about managing your reports in QuickBooks: https://quickbooks.intuit.com/learn-support/en-us/reports/07?product=QuickBooks%20Desktop%20for%20Ma....

Keep me posted if you need a hand with reconciling your accounts or any QuickBooks related. I'll be here to ensure your success. Take care always. 

Thank you so much for your reply and information provided.

I guess I should rephrase my question. I already know how to create a journal entry. What I need to know is what account should I post the negative retained earnings balance to on the journal entry to zero it out. I have an S Corp and have already passed that balance to my personal income tax. I'm trying to get an answer here, because of the situation we are in right now, it's been very difficult to get an answer from an accountant. Please help. Thank you.

Thanks for the response, @Wonderer.

To determine which account to use for the Journal Entry, I recommend reaching out to your accountant for the best advice. Rest assured, they'll know how our books are organized and know what's best for your company.

if you have any additional questions or concerns, please don't hesitate and reach back out to me! Have a great rest of your week.

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