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QB generated an unrestricted net asset journal entry after I entered other entries. I now have a negative fund balance in balance sheet equity section. Is this ok?

Forum|Forum|7 years ago
December 11, 2018
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QuickBooks Desktop

Best answer by qbteachmt

It isn't a Real entry. It is your Net Income math value, for the first date of the new fiscal year.

The Net income from the date before gets closed to "Retained Earnings" which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

That net income is already seen in Equity for the current FY, so nothing really changed.

Whether that is "ok" or not, depends on the data. If your data is Right, then this is reflecting that status.

If you are new at using QB for a Not For Profit, I recommend the book Running QB for Not For Profits, by Kathy Ivens.

Please see my attached reporting image.

qbteachmtAnswer

It isn't a Real entry. It is your Net Income math value, for the first date of the new fiscal year.

The Net income from the date before gets closed to "Retained Earnings" which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

That net income is already seen in Equity for the current FY, so nothing really changed.

Whether that is "ok" or not, depends on the data. If your data is Right, then this is reflecting that status.

If you are new at using QB for a Not For Profit, I recommend the book Running QB for Not For Profits, by Kathy Ivens.

Please see my attached reporting image.

R

Rhuz

Hi can we close unrestricted net assets to fund balance? How can we eliminate this account?

M

mv32

Hello there, @Rhuz. You can check your Chart of Accounts (COA) to see what transactions are associated with the account when you close this account.

Besides, Unrestricted Net Asset is your net income for the first date of the new fiscal year in QuickBooks. The net income from the date before gets closed to Retained Earnings which is often renamed to Unrestricted Net Assets. As you work on the previous year's financial data, that value will keep changing.

Also, I suggest consulting your accountant so they can guide you on how to deal with Unrestricted Net Assets whether to remove the account or not.

Check this article to learn more about the chart of accounts in QuickBooks: Understand the chart of accounts in QuickBooks.

You can comment here if you have other concerns about managing your accounts in COA. I'm always around to help. Stay safe, and have a nice day ahead!

Y

Yeye Ojo

This equally happened to me. Pls how do I correct this?

Clark_B

Thanks for joining the thread, @yeye.

As mentioned by our Allstar @qbteachmt, Unrestricted Net Assets is not an actual entry as it only represents your math for the first date of the new fiscal year. However, you can close this account by making a journal entry. The net income for the current fiscal year will be reflected in the Equity account.

Also, I suggest consulting your accountant for guidance on how to handle Unrestricted Net Assets, including whether to remove the account or not.

You might want to customize data and add or delete columns on your report, check out this article: Customize reports in QuickBooks Desktop.

Feel free to reach out if you have any further questions about the Unrestricted Net Assets account or any QuickBooks-related concerns. We'll be happy to assist you.

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