QuickBooks Accounting Software - Opening Bal EquityBack when I first set up my QuickBooks accounts in 2004 I had to enter the starting values for my various bank accounts. I ended up with an "Opening Bal Equity" entry (automatically) in my equity area. Here it is 2010 and I still have this mysterious row on all my reports! I decided it was time to figure out how to handle this.
You do NOT want to just delete this entry. Accounting programs do poorly when numbers are randomly deleted :)
Instead, what you want to do is make a journal entry to indicate this money becomes part of Retained Earnings. The way you do this is:
Make General Journal Entries
set the date to a date AFTER you finished setting up all your bank accounts
Create a first line for Opening Bal Equity. Set the CREDIT to the amount showing on your reports.
Create a second line for Retained Earnings. Set the DEBIT amount to the same value.
This will now zero out your Opening Balance Equity as a line item going forward, and properly include that amount in your overall retained earnings in the future.
Please let me know if you handle this in another way!
I want to note here that I am not an accountant, so if someone is doing this for tax reasons, they should always talk with their accountant
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