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Level 2

Why do I still have balances in my expense accounts carrying over to the next fiscal year?

My company is set up like most: the first month of both the fiscal year and the tax year is January. My closing date is set as 12/31/2019. I've read that QuickBooks is supposed to automatically make year end adjustments, but it doesn't appear mine has made any. 

 

My Retained Earnings account still has the same balance it had from 2018. QuickBooks didn't adjust it to reflect 2019 earnings whatsoever. All my equity accounts (dividends) have their balances still and all my expense accounts still have all of 2019's balances in them.

 

I'm now making our company's January entries and it's just adding the expense amounts to the balance carried over from 2019. Instead of zeroing out those expense accounts so we can see what the current year is spending. More or less, there's nothing to differentiate that I'm accounting in a new year. No balances have changed from 12/31/19 to 01/01/20. 

 

What am I doing wrong here? How do I get the retained earnings to actually reflect what was earned in 2019 (it's still showing 2018 balance, even though it's now 2020)? How do I get my expense accounts to begin with a zero balance for this fiscal year? How do I clear my dividend equity accounts?

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Best answer March 06, 2020

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QuickBooks Team

Why do I still have balances in my expense accounts carrying over to the next fiscal year?

Hello there, @SBrines34.

 

The previous balance will add on if you have new entries in QuickBooks. However, I recommend consulting with an accountant if you want to start your bank register with this year's transaction.

 

You can check out this article for more reference about the correct amount of your account base on the date and report basis: Understand the chart of accounts in QuickBooksUnderstand the chart of accounts in QuickBooks.

 

I'm always around to lend you a hand if you have any other inquiries. Have a good one.

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QuickBooks Team

Why do I still have balances in my expense accounts carrying over to the next fiscal year?

We'd want to have your financial records correct, SBrines34.

 

A possible data damage have caused the retained earnings to not show up and create an automatic adjustment for 2019. QuickBooks should automatically increase your Retained Earnings equity account by the previous year's net income.

 

Let's follow a couple of steps to resolve minor company file data issues. Let's start by running tthe Rebuild Data tool. Here's how: 

 

  1. Go to the File menu, then hover over Utilities and select Rebuild Data.
  2. On the QuickBooks Information window, select OK. Follow the onscreen steps to save a backup.
  3. Let the tool repair your file. 
  4. Once finished, select OK.
  5. Go to the File menu. Then hover over Utilities and select Verify Data.
  6. Let the tool check your file for data issues.

If prompted that there are data issues, click Rebuild Now. Once done, check if you can already see that the retained earnings are already carried over to the following year.

 

Keep us posted if you still need help with this. The Community is open 24/7 to offer our help. 

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Level 2

Why do I still have balances in my expense accounts carrying over to the next fiscal year?

Thank you for your reply. I did both of those, but it didn't work. My retained earnings account still shows 2018's balance. My income account still has all of 2019s income and when I make an entry in 2020, it's adding to that balance now. Is there a way to tell the program I'm in a new accounting year other than just the date I'm entering on checks and deposits? Is there any "year end" button to click or something? I can't differentiate any of 2020s data from 2019 at all because of this.

Highlighted
QuickBooks Team

Why do I still have balances in my expense accounts carrying over to the next fiscal year?

Hello there, @SBrines34.

 

The previous balance will add on if you have new entries in QuickBooks. However, I recommend consulting with an accountant if you want to start your bank register with this year's transaction.

 

You can check out this article for more reference about the correct amount of your account base on the date and report basis: Understand the chart of accounts in QuickBooksUnderstand the chart of accounts in QuickBooks.

 

I'm always around to lend you a hand if you have any other inquiries. Have a good one.

View solution in original post

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