Whenever we newly start a business, we normally open a beginning balance to record the accounts expenses, and payroll. And we manually do all things to enter opening balance, but with QuickBooks, we found little easy to enter the opening balance. But some of the QuickBooks beginners don’t have enough idea to set it properly. So here is the article, those who want to know about the opening balance in QuickBooks.
Steps to Create Opening Balance in QuickBooks Desktop
Create opening balance in Bank and Credit Card Accounts
- Open QuickBooks and go to the Lists menu.
- Select Chart of Accounts and choose the account on which you want to link it with.
- If the user does not have an account then you can click on the Create New Register and name the account.
- Then enter the start of your financial year and then you have to change the date of the beginning of the financial year of your company.
- The Number and Payee fields should be left blank.
- Go down to the page and there you will find the field for Opening Account Balance.
- Now, enter all the details of the opening account balance and recheck all the details again.
- For the bank account place all entry in the Deposit Field.
- For equity accounts use Increase Field.
- Click on the Account Type field to open the menu.
- From the menu opened select Opening Bal Equity.
- Click on the Record Button and then your entry is finalized and you can create a new opening.
Create opening balance in Other Types of Balance Accounts
For entering the balance entry in QuickBooks balance sheet for Equity, Fixed Asset, Current Asset, and Other Current Liability. Please take care that you should or have not created a double account entry.
Steps to Create Opening Balance in QuickBooks for Chart of Accounts
- Open the Company menu and click on the Chart of Accounts.
- Right-click on the window and select New in the chart of the account window.
- Choose the right account type and then add a new account screen that will appear and fill in all the required details.
- Click on the Enter Opening Balance button and enter the amount of opening balance and date and click ok.
- Click Save and Close.
Create a Journal Entry account
- Open the Company menu and select make general journal entries.
- Then set the date and number required.
- Select the account which you want from the Account column.
- In the right column enter the account balance as a positive account.
- Now for every account which you want to add, you need to follow the above steps again. You need to check that after entering all the information you need to check that the debit and the credit amount should be equal. Click on Save and Close.
- Now, you create a final journal entry to distribute the remaining balance in the opening balance equity account.
Create by doing Register
- Open the Company menu and click on the chart of accounts.
- Choose the account which you want to enter and then select Use Register from the Edit drop-down list.
- Fille all details of the new transaction as the date of opening balance, payee type, account chosen.
- In payment and deposit enter the opening balance in the Deposit field if it is positive and the payment filed is negative.
- Click Record.
Other Useful Resources:
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How to Migrate QuickBooks Self-Employed to QuickBooks Online
How to Find a Software Accounting Tool for Your Small Business
Create an Opening Balance Income and Expense Account
In this, we cannot enter balance for income and expense accounts. As the balance for these accounts comes from the transactions we have entered yet.
Check the Opening Balance Amount
- Go to the Lists menu and select Chart of Accounts.
- Open the Opening Balance Equity account.
- Then, check the account balance. It should be at 0.
If the balance is not 0 then follow the following steps:
- Go to Reports and click on Company & Financial.
- Then select the Balance Sheet Standard.
- Select Last Financial Year from dates.
- Check the Retained Earnings balance from the Equity section.
- Compare last year’s Retained Earnings balance with the amount showing in the Opening Balance account.
Edit the Opening Balance
- Click on Accounts and open the account in which changes have to be made.
- For the first transaction which has been made, you can click on the Date column to bring this transaction to the top.
- Click Edit and fill in the amount.
- Click on Save Transaction.
How to Enter Loan in QuickBooks
Create Loan Account
- Open the Company section and click on Chart of Account.
- From the menu click on Account and choose New.
- Select Other Account Types
- Choose Other Current Asset( if the loan is paid in this year only) or Other Asset ( if the loan is not to be paid in this year). Then click ok.
- Enter the name for the account and all the information in the Descriptive Box.
- Click Save & Close.
Create Loan Transaction
- Record the loan amount with a journal entry.
- Record the loan amount with a check if you’re giving cash to the customer.
- Click the Journal Entry icon to enter the loan with a journal entry.
- Choose the date of the loan and select loan account
- Enter the loan amount in the Debit column.
- Choose ‘Accounts Receivable‘ on the next line and type the loan amount in the Credit column.
- Enter the customer in the Name field. Click Save.
- Click the Customer icon and choose to Receive a Payment
- Select the customer and check the Total Credits box and click Save.
- Click Write Checks in the Banking section to loan cash.
- Select the banking account from which the company is giving the loan and the date of the loan.
- Enter the loan amount in the Debit column and complete the check with all the information.
- Choose the loan account you created. Click Save & Close.
So, for creating an opening balance sheet we can create it by Bank or credit card accounting, Chart of Accounts, by using Journal Entry, through a register, or by Expense account. By using all these we are able to create QuickBooks balance sheets for Equity, Fixed Asset, Current Asset, etc. In this article, it is also included that How can we Enter a Loan in QuickBooks.
Ending Words!
At the end of this article, we hope that you would like it and understood the process of how to enter the opening balance in QuickBooks Desktop. Still, if you are seeking for help then you can get our QuickBooks support from our experts at any time and anywhere.