Understanding QuickBooks opening balance equity

Trace the balance back to account setup

QuickBooks uses Opening Balance Equity to offset account opening entries and keep the books balanced. Locate the entries that created the balance and identify the bank, credit card, asset or liability account on the other side. Keep the original setup date visible in your review notes.

Sources: QuickBooks Support (Intuit)

Match the starting date to supporting statements

Intuit’s setup process includes an opening amount and an “As of” date. For an existing account, its guidance uses the beginning date of the next statement. Compare the amount with the supporting statement rather than using today’s bank balance to repair an older opening entry.

Sources: QuickBooks Support (Intuit)

Avoid importing history twice

Transactions before the starting date may already be summarized in the opening balance. Intuit recommends working with an accountant when adding earlier transactions. Pause the import until you know how that history will affect the starting balance and reconciliations.

Sources: QuickBooks Support (Intuit)

Review the first reconciliation separately

Intuit’s first-reconciliation guidance says the opening balance should match the bank records and be the only reconciled entry at that starting point. An unexpected reconciled transaction can complicate the review. Preserve a copy of the reconciliation and investigate the source of the difference.

Sources: QuickBooks Support (Intuit)

Resolve equity with the accountant

For Desktop, Intuit says Opening Balance Equity should be zero and directs users to work with their accountant to move a leftover balance to appropriate equity accounts or retained earnings. That is not a universal instruction to post everything to income. Let the business history and CPA’s review determine the correction.

Sources: QuickBooks Support (Intuit)

Sources: starting balances

• QuickBooks Support (Intuit)
• QuickBooks Support (Intuit)
• QuickBooks Support (Intuit)