Question

Retained Earnings

Forum|Forum|4 years ago
November 23, 2021
1 reply
5 views

The company I work for has multiple retained earnings accounts (for prior phases of the Company, to show activity for the different phases). We just created a new QuickBooks file, so a retained earnings account was created automatically by QB. I wanted to rename the account and make it a subaccount of a parent retained earnings account that holds all of our RE accounts, but QB would not let me. I deleted the account and created a new retained earnings account customized to how I wanted it as a subaccount. But now I have done some research, and it looks like I cannot choose which account to close the books to at the end of the year. Ideally, when we close the books at the end of the year, I would select the new RE account I created to be the account which closes all the income statement accounts, is this possible? If not, am I going to be able to close the books even though I deleted the initial RE account that QB created?

QuickBooks Desktop

M

MirriamM

QuickBooks Team

Hi there, @vytronaccounting.

In QuickBooks Desktop (QBDT), once you create a new company file, the Retained earnings account is automatically added to your Chart of Accounts. Thus, being able to delete default accounts is not an option.

Then, when closing out your books, there are closing entries made at the end of the fiscal year to transfer the balance from the Income and Expense accounts to Retained Earnings. In which its main goal is to zero out your Income and Expense accounts, then add your fiscal year's net income to Retained Earnings.

As for your concern, in selecting the created Retained earnings account to close all the income statement account, it's not possible as of the moment since QuickBooks uses the default account. You may consider transferring the amounts manually from the default Retained earnings account to the created one. But before doing so, I recommend checking with your accountant to ensure your books are accounted for correctly.

To learn more about managing your Chart of Accounts and how to close your books, see the below articles:

For future help, you can visit our Reports and Accounting articles if you need some related references in managing your accounts and transactions.

Stay in touch if you have any other questions. Have a great day ahead.

V

vytronaccountingAuthor

It makes sense that you would not be able to delete a default account, but mine is gone. I deleted it, and did not just make it inactive. Is there a way to get it back? What will happen when I close my books with no default retained earnings account?

Kristine Mae

Moderator

We're unable to delete a default account, Vytronaccounting. Let me help you sort this out.

First, let's check through the inactive list. Then, from there, we can see the account in question. Here's how:

Click Lists.
Go to Chart of Accounts.
Tick the Include inactive box below.

There's an X mark beside an inactive account. You can now look for retained earnings.

If you're unable to see it, the account may be renamed. You'll have to look for an Equity account. If you have found it, you can rename it back to Retained Earnings.

With regards to if the book is closed with no retained earnings, only revenue, expenses, and dividend accounts are closed - not asset, liability, common stock, or retained earnings accounts.

Also, you can pull up the Balance Sheet report. It will show you the Retained Earnings amount. Additionally, you can customize the report to show the details that matter to you.

Feel free to let us know if you have other concerns. We're available 24/7 to assist you. Keep safe!

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