I just generated a Balance Sheet Report for 3 years where the Total Assets does not equal the Total Liabilities and Shareholder Equity for one out of three years. Why?

Let's find out why your total assets don't equal the total liabilities and shareholder equity, netprosync.

The fundamental accounting equation states that assets must always equal the sum of liabilities and equity. Incorrect recording of financial data can lead to imbalances in the balance sheet. We can troubleshoot this by following these steps:

1. Review each account on the report to see the transactions related to the balance of each account. 
2. Start running the report for the year-to-date (YTD) period and gradually narrow down the date range each month until you pinpoint the specific period when the balance sheet becomes unbalanced. 
3. From there, you can start to figure out what transaction is causing the balance sheet to be off and resolve the issue.
    

Furthermore, I'll add this article to help you fix issues with the balance on a cash basis balance sheet: Resolve accounts receivable or accounts payable balances on a cash basis balance sheet in QuickBooks....

I'll always be around to help you. Leave a reply below if you have additional questions about troubleshooting balance sheet reports. Have a great day!

I was able to trace the discrepancy to retained earnings.  This problem can be recreated.  When I produce a balance sheet for 2021-2023 for annual comparison, the retained earnings for 2023 is a negative number which led to the imbalance between total assets and total liabilities plus equity.  But when I run the same balance sheet report only for 2023, there is no problem and everything balances out and the retained earnings entry is correct.