QuickBooks when initially set up asks you to set up your business assets and liabilities. But what if, you already have properties or balances from the previous year? How you will record this in your QuickBooks accounts? Well, it can be done by creating a simple Equity account wherein you will put your opening balance.
QuickBooks offers two types of equity accounts: common stock and preferred stock. Common stock is the most common type of equity account and allows shareholders to vote on company matters and receive dividends.
How to Create an Owners QuickBooks Equity Account
- Login to your account and navigate to the Chart of accounts from the Lists menu.
- Now click on the Opening balance equity account.
- From there select the Register button from the activities menu.
- Now you would need to enter the equity amount in the decrease column.
- This way you will send the amount to retained earnings account.
- If you have a positive balance then you can enter your balance on the increase side of the column.
If you are still not able to figure out why we use an equity account and how to set it up in QuickBooks then you can contact Askforaccounting.com and talk to our QuickBooks Expert.
