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.
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.
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Re: 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?