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T
Trebalisa
October 8, 2024
Solved

Opening Balance of Retained Earnings

  • October 8, 2024
  • 3 replies
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Hi All,

 

I am setting up our charity on QuickBooks. I have uploaded the Chart of Accounts including the balance sheet Accounts. I am now uploading the opening balances of the balance sheet accounts via Journal Entry. I understand the contra entries for all the balances go to Opening Balance Equity but what are the double entries required to reflect the brought forward Retained earnings balance? Credit Retained Earnings and debit Opening Balance equity too? 

 

Thanks

Best answer by Rainflurry

@Trebalisa 

 

"I understand the contra entries for all the balances go to Opening Balance Equity but what are the double entries required to reflect the brought forward Retained earnings balance? Credit Retained Earnings and debit Opening Balance equity too?"

 

Yes.  

3 replies

S
Shahul Hameed India
November 30, 2024

Usually QBO creates/updates Retained Earning Account automatically against Profit & Loss Accounts at every end of fiscal year. However, you can also update an opening balance of Retained Earning Account in Journal Entry by manually against only Profit and Loss Accounts. Example all revenue, cost of goods sold and expense accounts can be closed against Retained Earning Account at every end of fiscal year. That's it.

    Rainflurry
    RainflurryAnswer
    December 1, 2024

    @Trebalisa 

     

    "I understand the contra entries for all the balances go to Opening Balance Equity but what are the double entries required to reflect the brought forward Retained earnings balance? Credit Retained Earnings and debit Opening Balance equity too?"

     

    Yes.  

    T
    TrebalisaAuthor
    December 4, 2024

    Thank you for your response. I proceeded with this back in October and it worked, thankfully.

    S
    Shahul Hameed India
    December 1, 2024

    If prior Profit and Loss Statement shows profit, then make JE as Retained Earning Account (Credit) against all corresponding Profit and Loss Accounts on reversal basis (Debit and Credit). 

     

    If prior Profit and Loss Statement shows loss, then make JE as Retained Earning Account (Debit) against all corresponding Profit and Loss Accounts on reversal basis (Debit and Credit). 

    That's it.

     

    Rainflurry
    Rainflurry
    December 2, 2024

    @Shahul Hameed India 

     

    There are no previous year's P&Ls because the OP is setting up QuickBooks for the first time.   

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