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A
aurora_metro
March 29, 2021
Question

brought forward open balance for retained earnings

  • March 29, 2021
  • 1 reply
  • 0 views

Hi There

 

How can I bring forward Retained Earnings from previous year when migrating to Quick books online.

(in  our case a loss).

I entered an amount under RE as an opening balance.

 

It went on transforming into a journal, Debiting the Retained Earning (equity account) and crediting the profit bought forward account under long term liabilities. This is looking wrong on the balance sheet as it should only be one entry under equity. It can show as a negative Equity if is a loss.

 

Tried to re-enter a balance, but this option under RE in chart of account is not longer available when trying to edit the RE account?

 

I do not want a journal, just an opening balance, why the double entry kicks in?

 

Thank you for your assistance , please email back [email address removed]

1 reply

Rubielyn_J
Rubielyn_J
March 29, 2021

Hi there, @aurora_metro. I have few insights into how to handle retained earnings in QuickBooks Online.

 

If you're creating a new company file, simply enter the balance sheet items, including income and expenses. Retained earnings are last year’s net income, so once you have transactions from last year entered into the QB, the retained earnings will have an entry.

 

All starting balances for balance sheet entries are automatically posted to the Opening Balance Equity (OBE) account. Then use a journal entry to transfer the OBE to the equity owner.

 

Additionally, you can enter an opening balance into your retained earnings account by creating a journal entry.

 

Here's how:

  1. Select the (+) New icon.
  2. Choose Journal Entry.
  3. Arrange the date for the opening balance to match.
  4. On the first line, from the Account column, select Retained Earnings.
  5. Fill in the amount of the balance in the Credits column.
  6. On the second line, select the account we're using to create the balance. 
  7. Enter the amount in the Debits column.
  8. Click Save and close.

 

Take note that when it comes to selecting an account, it would be best to reach out to your accountant. This is to ensure that your recordings are accurate. 

 

To learn more about retained earning, please refer to this resource: How to view Retained Earnings account details.

 

If there's anything else I can help you with, please let me know. I'd be happy to get back to you and provide additional assistance. Have a good day.

A
aurora_metroAuthor
March 30, 2021

Hi there

 

I appreciate your attempt at solving my query 

 

I did mentioned we had a loss from previous years& previous accounting system  to carry forward.

The journal would therefore need to

 

Debit retained earning account

credit account used to create the balance ??

 

Therefore here are my issues

with a journal creation, we need a double entry, so although the first line of the 

journal is showing the loss under RE on the balance sheet correctly IE a - sign for negative,

when I am using the journal entry method...

 

The second line is the problem ....IE ending up under non current liabilities, surely we

would not create another equity account for the second entry?

 

Plus with regards to the Retained Earning account, unless I create a journal, there are no ways of adding an amount  (ideally an opening balance for RE b/fwd) on this account as I mentioned on my first query mail.

 

I just want to see one line on my balance sheet , with the carried forward balance showing on it.

Isn't it what all balance sheet look like across the board?

 

Why is it so difficult to achieve here

 

The understanding of RE or how to create a journal is not the issue here.

Let alone that we are 2021, and this is a query re opening balance back on the 01/04/2018, when we went live with quickbooks online 

 

Thanks for your help if you can

    L
    lgeltman
    April 1, 2022

    I did not see a reply to the last comments made by the user. I have exactly the same problem and need to fix this issue.

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