How to adjust retained earnings in QuickBooks
Retained earnings indicate the assembled balances of small and medium sized businesses at the end of the year. Once all the invoices have been dispatched and the bill payment is done successfully, the negative and positive balance of your business is moved to the books of the following year. These balances are then referred to as Retained Earnings. The balance moved to the new account comes to zero for the new fiscal year and you can easily track the ways your business assembles finance. You can even track if it is losing anything in the way. What Retained earnings mean in general accounting can be found here.
Working Procedure of Retained Earnings
When you create a new company file within the QB then a new equity account is created automatically. QuickBooks application automatically moves the balance from your business to the other accounts to Retained Earnings of the mentioned date, determining the closing date you mention for the fiscal year.
Transferring this balance of your business is essential as it assures that the numbers and transactions of your business performance that will reflect in the books will be only of the current fiscal year. With the help of the Retained Earnings account, you can easily track the total business capital used for expenses for business related purchases and payments either to partners or clients.
How to View the Retained Earning Account in QuickBooks:
It is very easy to view the Retained Earning Account in QuickBooks:
- Click on the Menu tab and select Company & Financial.
- Click on where it says “Balance Sheet Standard’s” tab
- You can find retained earnings in the Balance sheet under the Equity head.
For viewing transactions in the account:
- Click on the Company’s menu tab. There you can find COA.
- Click on the “QuickZoom” button opposite to Retained Earnings entry at the chart below to see a full list of transactions.
Adjusting the Retained Earnings in New Account in QuickBooks
QuickBooks authorizes you to withdraw from the Retained Earnings account via different ways like balance sheets, journal entries or by writing a check. Whenever a new transaction is entered in a balance sheet you can mention the total and choose the Retained Earnings from the Account list to withdraw from the equity funds.
While making a transaction to your Journal tab make sure you to verify all entries before writing a check. Ensure that you save all the details before you make any new adjustments to your Retained Earnings balances.
How to find Retained Earnings Account?
QuickBooks software automatically generates an account to store data for Retained Earnings. However if the user is unable to locate it, then the plausible reason for the same is that the account might have been deleted or disabled. To resolve the issue and view disabled accounts just follow the instructions listed below:
- Open the QuickBooks software and locate ‘Lists’ from the menu bar.
- Select the option Chart of Accounts followed by ‘Accounts’ tab.
- Now select the option ‘Show Inactive accounts’ and then clicking in the box against Retained Earnings option to remove the ‘X’ symbol.
This should reactivate the Retained Earning account. On the other hand, if the account has been deleted, it can easily be regenerated through following steps:
- Open the ‘Reports’ menu and then select the option ‘Company and Financial’.
- From the new menu click on ‘Balance Sheet Standard’ and choose to select a report.
Once the user tries to generate the report, the software will create a new Retained Earnings account.
Hope we were able to resolve your query. If you have any further question on the topic or you want to add something to it then do write to us in the comment section.
Still in Doubt…!
Request a Call Back
Talk to our Quickbooks Proadvisor and resolve your issue over a phone call.