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I tried entering my inventory items one by one then the amount goes to opening balance equity account. What other accounts can i move the amount to zero out the opening balance equity?
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@ union
If you create an item with qty and cost, then yes that cost posts to OBE be default in QB.
OBE is an account intuit created so it did not have to deal with equity distribution in multi owner businesses. After all starting balances are entered, then you clear OBE to owner/partner equity with a journal entry
debit OBE, and credit owner/partner equity
For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), 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
@ union
If you create an item with qty and cost, then yes that cost posts to OBE be default in QB.
OBE is an account intuit created so it did not have to deal with equity distribution in multi owner businesses. After all starting balances are entered, then you clear OBE to owner/partner equity with a journal entry
debit OBE, and credit owner/partner equity
For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), 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
But what if the client didn't create a quantity zero and the and the balance went to OBE how do you take it out of OBE? I have a client who did that not the OBE balance is high with all inventory, how do I get OBE to zero? whats the best JE
Sofie12, were you ever able to figure this out? I'm having the same issue and I need to move inventory out of OBE
Hi there, @Amasters.
You can create a journal entry to remove the asset from your book since you no longer track inventory:
I also advise reaching out to your accountant who can tell you which process would be better for your specific books.
Let me know if you have additional questions for me by adding a reply. I'd be happy to help you further. Wishing you and your business continued success!
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