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Real Estate Partners LLC
Level 3

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Why doesn’t Retained Earnings show the balance when looking at the Chart of Accounts. Is it supposed to? If not, please help me understand the rationale for not showing a balance. The other equity accounts show a balance, so it seems it would be helpful if Retained Earnings showed the current balance as well.


Second question: when I pull up the Quick Report (double-clicking Retained Earnings in Chart of Accounts), I see the Closing Entry. When I zoom (double-click) on the Closing Entry, all I get is the Make Deposit window showing the deposit I made into the Interest Income account at the end of the year. Shouldn’t it show me all the numbers that made up the Closing Entry? I’m trying to understand why it’s showing me that window and nothing else. I’d appreciate any helpful insight into these questions.

Solved
Best answer February 09, 2019

Best Answers
Kristine Mae
QuickBooks Team

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Hello there, Real Estate Partners LLC.

 

You can pull up the Profit & Loss Detail report. This will show all of the transactions that make up the net income or loss that QuickBooks automatically switched to your Retained Earnings account.

 

Here's how you can find the report:

  1. Click Reports.
  2. Go to Company & Financial.
  3. Choose Profit & Loss Detail.

If you need more help, you can always drop a comment. Have a great day! 

View solution in original post

6 Comments
IamjuViel
QuickBooks Team

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Hello there, @Real Estate Partners LLC.

 

I’d like this opportunity to share some information on how does QuickBooks Desktop handles retain earnings.

 

Retained Earnings account is an equity account that QuickBooks automatically adds to your chart of accounts when you set up a new company. QuickBooks uses this account to track profits from earlier periods that have not yet been distributed to owners.

 

At the beginning of a new fiscal year, QuickBooks automatically transfers the net income into your Retained Earnings account.

 

Since Retained earnings is from the Net Income of the Income and Expense accounts from *previous fiscal year*, it doesn’t track the running balance like Bank accounts. There’s no running balance from the Retained Earnings because this account is just a product of the net income which is the difference of the income and expenses from last fiscal year.

 

For additional insights, you may check out these articles:

Please don’t hesitate to click the Reply button if you have other questions about the information included on your Balance Sheet report. I’m always here to help.

Real Estate Partners LLC
Level 3

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Thanks for the explanation of the Retained Earnings account.  I was able to pull up the Net Income Detail report which included the exact information that I was looking for. It shows me the calculation to get to Net Income.  It seems to be a helpful report, but it's not showing up in the Report Center.  Where can I find that report? 

Kristine Mae
QuickBooks Team

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Hello there, Real Estate Partners LLC.

 

You can pull up the Profit & Loss Detail report. This will show all of the transactions that make up the net income or loss that QuickBooks automatically switched to your Retained Earnings account.

 

Here's how you can find the report:

  1. Click Reports.
  2. Go to Company & Financial.
  3. Choose Profit & Loss Detail.

If you need more help, you can always drop a comment. Have a great day! 

View solution in original post

Avvia
Level 1

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Should the equity accounts (Member Contributions and Member Draws) for a sole proprietorship be closed out also?  Right now after QB Desktop transferred my net income to RE, the expense accounts and income are still showing in the COA.  How do I get it to clear so expenses and income can be tracked for this next year?

RW101
Level 1

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Thank you, I see this in my balance sheet report. But this amount does not show up in my Profit and Loss statement. The net income when comparing the BS to the P&L if off by the amount of the "retained earnings". How do I include this in the P&L? Thank you!

LieraMarie_A
QuickBooks Team

Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Let me share some info about getting the Retained Earnings details in QuickBooks Online (QBO), @RW101.

 

Retained Earnings (RE) are the residual net profits after distributing dividends to the stockholders. Thus, to calculate this on the Balance Sheet (BS), you need three items as per the formula:

  • Beginning period retained earnings (This can be found in the balance of the previous year, under the shareholder’s equity section on the liability side)
  • Current year net profit/loss
  • Dividends paid (cash and stock dividends)

 

For more info, check out this write-up: RE Formula: Definition, Formula, and Example.

 

This means that your current net profit/loss is only a part of the retained earnings on the balance sheet. This also indicates if there's a difference between the current RE amount and the net profit/loss. You may have entered transactions against this account that only affect the Balance Sheet. You can see these transactions on the account Quick Report. 

 

Here's how:

  1. Go to the Gear icon, then select Chart of Accounts.
  2. Locate the Retained Earnings account.
  3. From the Action column drop-down menu, select Run Report.
  4. From the Report period drop-down list, select All Dates.
  5. Select Run report.

 

You can check out this article for more information about this: How to view Retained Earnings account details.

 

Fill me in should you need further assistance with calculating the retained earnings. I'm always here to help you.

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