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QuickBooks is an accounting software that helps small to midsize businesses with easy accounting and bookkeeping. When engaging in accounting, you must have heard of several terms that you are not quite aware of. If you’re new to the accounting field, you are going to get confused with the terms that sound heavy yet mean simple. One such term is opening balance equity in QuickBooks.
Opening balance equity in QuickBooks is among those accounts that the software generates automatically after the generation of a company. When you first record balances into the accounts, you use QuickBooks opening balance equity as the off-setting entry. It comes under the equity section in the balance sheet of the company. You need to set up QuickBooks opening balance equity to balance prior account transactions. Therefore, it makes sure that the books are matching.
To know if the account entry in the start is correct or not? compare the entire opening balance equity in QuickBooks to the total sum of the prior account balance recorded of opening equity accounts. If the balance does not match, you will need to recheck the entries for any issue in the entry of data. If it matches, the starting entry is correct.
You can think of opening balance equity QuickBooks as a source for QuickBooks to use for balancing the transactions of all accounts.
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QuickBooks opening balance equity comes under the equity section in the balance sheet. Other than equity, there are two other sections, namely, assets and liability. These three comprise the balance sheet and the equation formed is:
Assets = Liabilities + Equity
Furthermore, in the end, the balance sheet is to be balanced, i.e. you get a zero. If not, you will need another account to offset the amount left. Therefore, opening balance equity QuickBooks. For instance, if $1000 is the remaining balance, you will create an opening balance equity account to offset this balance and therefore tally the balance sheet.
Opening balance equity in QuickBooks is set up in exactly the same way as a credit card or any bank account. Let’s hop onto the step to set up opening balance equity QuickBooks.
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If you want to reset or clear the QuickBooks opening balance equity, the steps are very easy and sorted. All you have to do is follow these steps, precisely:
Each and every part or feature of QuickBooks has its characteristics that make them stand out. Similarly, opening balance equity QuickBooks has certain features or symptoms that are:
Opening balance equity QuickBooks can be complicated to set up and hence, you might end up making errors. Here’s a list of common QuickBooks errors users make while setting up opening balance equity in QuickBooks:
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It is very obvious that you’ll want to review transactions and balance in opening balance equity QuickBooks. However, you cannot review those if you don’t know how. Therefore, we bring before you ways you can review the opening balance equity in QuickBooks. It can be done by creating a report of all the entries and transactions. Follow these steps one by one:
The QuickBooks opening balance equity is closed into the retained earning account of the previous year when the balance in both is equal. Nonetheless, you can review separate opening balance equity QuickBooks transactions by:
Coming towards the end, we hope you have got a grasp of what opening balance equity is in QuickBooks and how it works. Having said that, let us know in the comments if you have any doubts and we’ll get back to you with the best and most satisfactory solution. Alternatively, you can contact our customer support team for any issues and glitches. We are available twenty-four seven at your back and call, specifically for resolving your problems and issues.
A balance sheet consists of different balances from all accounts. The opening equity account falls under the equity section of the balance sheet along with other accounts. When the balance of the opening equity account is zero, it will not show up on the balance sheet. This is a good thing as the account is temporary. However, there is no such rule that it has to be zero, it can contain a balance.