Opening Balance Equity Account Issue (2024)

‎January 11, 202211:14 AM

Hi, I am trying to file my corporate taxes for the first time and when I sent my balance sheet to the account he said I should clear my Opening Balance Equity account.

I see some Decrease transactions from my credit card when I created that account and put opening balance in it also i added few inventory items and added opening value for those at the time of creating .

Just to be clear I created this new file for my cooperation and cary forward the inventory and credit cards from my old self employed business.

Please help me clear this account . Thanks

• QuickBooks Desktop

ReymondO

I'll help you free up your opening balance in your QuickBooks Desktop account, @HRB16.

I'll make sure your equity balance gets cleaned up in no time. This way, you can send yourBalance Sheetreport again to him. So he can process and submit your corporate taxes without a moment's delay.

TheOpening Balance Equityaccount should have a $0.00 balance. For the balance to be zero, ensure that everything has been put in place correctly.It seems that something was likely posted to it that shouldn't have been, or there was a missed entry. With this, I'd recommend double-checking your transactions by running theBalance Sheetreport. Make sure you have your bank statement ready to compare to your QuickBooks data.

To get familiar with handling opening balance, check out this link: Enter opening balances for accounts in QuickBooks.

If you've checked everything over and can't pinpoint an error, I'd recommend reaching out to an accountant. They can clear out accounts and ensure your opening balance is entered correctly.

Further, visit these articles below on how to reconcile accounts and prepare year-end tax returns in QuickBooks:

• Year-end guide for QuickBooks Desktop
• Reconcile an account in QuickBooks

I always check my notifications to keep track of responses. That said, please feel free to tag my name in the comments area if you have a follow-up question. Happy to help you again. Take care,HRB16.

Let me join in this conversation and provide you with further assistance, @HRB16.

Once you create a bank account and enter an opening balance, QuickBooks will automatically post it in theOpening Balance Equity. That is the reason why it shows anentry in your account.

Once done,create a journal entry to move the amount and zero out yourOpening Balance Equity account's balance. Here's how:

1. Go to theCompanymenu and selectMake General Journal Entries.
2. Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
3. ClickSaveorSave & Close.

Moreover, you can check out ourYear-End Guide for QuickBooks Desktop. This will provide you with some info onwhat you'llneed to do when closing your booksand preparing for the new one.

Please know that I'm just a post away should you need anything else or if you have any QuickBooks concerns. I'm always here to help and ensure that your questions are addressed accordingly. Wishing you a wonderful week ahead.

Hi

I am a beginner for QB. I just want to know whether is it possible to daily transaction for a company qb file without zero out opening equity account. We have been in business for while now i am using QB. We have opening figures for last fiscal year end at 31 dec 2021. We are planning to start Qb at 1 October 2022 but there are few problems as it takes days to update pending 9 months to come up with an opening figure for petty cash we had. What will happen if enter opening balance of last year and enter daily transaction from October 2022 without zero opening equity first. Is that possible? Or if enter last year closing balances and zero it and start entering transactions. I am worrying if it won't balance what i will do the difference. I am using QuickBooks Accountant Desktop 2022. Please advise the best way among this options . Thank you

Hello, Fathun.

When starting fresh with QuickBooks in creating accounts, I suggest we'll have to reconcile the transactions first to accurately manage your books. We'll need your bank statement to make sure they match your bank and credit card statements.

The beginning balance amount should match what's on your bank statement for the same start day. That being said, we can fix the opening balance by entering it of yourreal-life bank account.

Also, closing books ensures your financial data stays the way you want it to. It also prevents any accidental changes that could affect your financial reports. This locks your books so no one can edit your accounting data prior to the closing date. It will not zero out your beginning balance. Instead, it closes out yourIncome and Expense accounts and rolls up your net profit or loss as your Retained Earnings.

Also, I recommend seeking expert advice from an accountant. This way, we'll be able to ensure that the process is adequate, and your books are error-free.

I'll leave some articles to help you further with the process:

• Reconcile an account in QuickBooks Desktop.
• Enter opening balances for accounts in QuickBooks Desktop.
• Fix beginning balance issues in QuickBooks Desktop.
• Fix issues when you're reconciling in QuickBooks Desktop.

I'll add these articles that tackle year-end guide and closing books in QBDT for more information:

• Close your books in QuickBooks Desktop.
• Year-end guide for QuickBooks Desktop.

If there's anything else that I can help you with, please let me know in the comments below. I'll be here to lend a hand.

Our account not only created an automatic entry to Opening Balance Equity when we entered opening balance for our cash account, but for every account we opened with an opening balance. For example, all entries to Partner's actual equity accounts, mortgage opening balances, A/P, A/R, and land, buildings, etc. caused QuickBooks to make an automatic entry to OBE. Now it appears in our balance sheets and to me it seems like it's double accounting and misrepresenting my financial statements.

If I create a clearing account and move the balance of the OPE account to it, how is that any different? Will it just be "written off"?

I can share some information about creating a clearing account, Manuel.

Setting up a clearing account will let you move money from one account to another account. You can create a clearing account from the Chart of Accounts. Make sure not to enter an opening balance. Then, you can use that account when creating a journal entry when moving those amounts.

Here's how to create a clearing account:

1. Go to theListsmenu and selectChart of Accounts.
2. Right-click anywhere in the Chart of Accounts and click onNew.
3. In theAdd New Accountwindow, select theBankradio button.
4. Click onContinue.
5. Set an account name and then make sure not to enter an opening balance.
6. Click onSave & Closeonce you're done.

For more information about adding a clearing account and using this account to create a journal entry account, check out this article:Set up a clearing account.

Here's also more information on how you canresolve AR and AP balances on the cash basis Balance Sheet.

Let me know if you have further questions about clearing accounts. I'm always here to help! Have a great rest of the day!

It's our pleasure to have you here today, Denise. We'll share helpful information to complete setting up your barter account inside QuickBooks Desktop (QBDT).

When setting up a barter account in your COA, the account type to use is the Bank account type to track the in and out of the barter transaction. Although it won't hold any money, it'll record the value of the services or items you provide and receive. These are the steps:

1. Access your QuickBooks Desktop company.
2. Go to the Company menu, and then choose Chart of Accounts
3. Click the Account dropdown button, and then choose New.
4. Choose Bank, and then click Continue.
5. Enter the necessary details.
6. Once done, click Save & Close.

If you're unsure of the process, it's best to contact your accountant so they can provide you with other ways to manage a barter transaction you have. If you don't have an accountant, we can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

In addition, you can check this page to help you keep track of every transaction you enter inside the program: Understand reports.

We look forward to having you here if you need more help completing the setup for a barter account inside QuickBooks, Denise. Feel free to drop by anytime, and we'll be here to assist you. Keep safe, and have a nice day.