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Retained earnings - opening balance

I am trying to key in all the numbers from last year's balance sheet from my CPA.  Could not figure how to key in the retained earnings as they did not ask for opening balance amount?  Why is that?

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Best answer 10-15-2018

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Established Community Backer ***

@ kaffa If you are creating a new company file, just ente...

@ kaffa

If you are creating a new company file, just enter balance sheet items (not equity though) and income and expenses

retained earnings is last years net profit, so once you have the transactions from last year entered in QB, retained earning will have an entry.

All the starting balances for the balance sheet entries automatically post to the Opening Balance Equity account
then you use a journal entry to move OBE to owner/partner equity
debit OBE, credit equity
then move retained earnings to equity for the current year
debit RE, credit equity

The above assumes you are NOT taxed as a corporation

For a company taxed as a sole proprietor or partnership, I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

2 Comments
Established Community Backer ***

@ kaffa If you are creating a new company file, just ente...

@ kaffa

If you are creating a new company file, just enter balance sheet items (not equity though) and income and expenses

retained earnings is last years net profit, so once you have the transactions from last year entered in QB, retained earning will have an entry.

All the starting balances for the balance sheet entries automatically post to the Opening Balance Equity account
then you use a journal entry to move OBE to owner/partner equity
debit OBE, credit equity
then move retained earnings to equity for the current year
debit RE, credit equity

The above assumes you are NOT taxed as a corporation

For a company taxed as a sole proprietor or partnership, I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

Active Member

Hello kaffa_wong, You can enter an opening balance to you...

Hello kaffa_wong,

You can enter an opening balance to your retained earnings account by creating a journal entry.

Here's how:

  1. Go to the Create (+) icon.
  2. Select Journal Entry.
  3. Set the date for whatever date you'd like the opening balance to match.
  4. On the first line, from the Account column, select Retained Earnings.
  5. Enter the amount of the balance in the Credits column.
  6. On the second line, enter the account we're using to create the balance. Note: When it comes to selecting an account, it would be best to reach out to your accountant.
  7. Enter the amount in the Debits column.
  8. Click Save and close.

If you need further assistance, please let me know. Thanks!