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Level 1

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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Level 15

Retained earnings - opening balance

@ 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

View solution in original post

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Highlighted
Level 15

Retained earnings - opening balance

@ 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

View solution in original post

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Level 3

Retained earnings - opening balance

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!

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Level 1

Retained earnings - opening balance

I do not want to enter last years transaction as there are too many and I want a fresh start. How do I enter a single entry opening balance for retained earnings. Like wise I want to enter beginning balances for A/R for multiple customers. Some of the balances are for over two years as we have extended projects and partial payments. How do you enter just the A/R beginning balances with entering 100's of invoices and partial payments. Uploading dta is not an option as we do not want to load 20 years of data?

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QuickBooks Team

Retained earnings - opening balance

Hello, @Larry2020.

 

You can create a liability account to track the amount of the retainers you receive from your customers. Once completed, you can add a retainer item and use it in creating a Sales Receipt or Invoice to record the retained earnings.

 

Here's how to create a liability account:

  1. Go to the Accounting menu.
  2. Choose the Chart of Accounts tab.
  3. Click the New button.
  4. From the Account Type ▼ drop-down menu, select Other Current Liabilities.
  5. Select Client Trust Accounts - Liabilities from the Detail Type ▼ drop-down menu.
  6. Enter a name for the account.
  7. Click Save and Close.

Now, you can create a retainer item. Here's how:

  1. Click the Gear Icon ⚙.
  2. Choose Products and Services.
  3. Select New.
  4. From the Product/Service information panel, select Service.
  5. Enter a name for the new product or service item (ex. Retainer).
  6. From the Income account ▼ drop-down menu, select Trust Liability Account.
  7. Click Save and close.

Now, you can create a sales receipt or an invoice. You can refer to this article for more detailed instructions: Record a retainer or deposit.

 

On the other hand, you can also follow the steps shared by @nicole to create a journal entry and enter the beginning balance or retained earnings.

 

Get back to us if you have other questions about tracking your beginning balance. I'm always here to help.

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