Quickbooks 2020 Tutorial for Beginners - How to Enter Opening Balances for Accounts

QBUniversity.org - In this Quickbooks 2020 tutorial for beginners I walk through how to enter opening balances for accounts.
When you create a new account in Quickbooks Desktop, oftentimes there is a balance already in the account. This is especially true for bank accounts. This video walks through how to properly account for the opening balance so that you can reconcile the account and so that your financial statements are accurate.
Discover more at QBUniversity.org

[@technogroup8543]

Really good.Sorry that it was only today that I discovered your videos; thanks so much!

[@QbuniversityOrg]

You’re welcome!

[@Mrsdevsgirl]

Opened a new bank account which deposit was a loan, I recorded it as loan. It looks correct. Thank you for all your videos.

[@QbuniversityOrg]

Welcome!

[@carolinacepeda2345]

I just started quickbooks and the company already had these opening balances. So from what account should I used to move it out from that plug account?

[@graceyim2941]

Got it. Thanks 😊.

[@QbuniversityOrg]

Welcome!

[@pradhanbalter3796]

Hi, thanks for your great tutorials. What about a brand new qb account where you are entering bank balances from the previous year as the starting point? I understand the other balance sheet items...but to what account should a bank balance be charged off to?

[@user-nq7zk4sh9v]

What about a petty cash account that's been existing (I have cash in my drawer) and now I want to use a petty cash bank account in quickbooks? Would you do it this way?

[@sosiamul]

My Home work is create chart of account and add these opening balance then follow the transaction and do invoice ,bill and other stuff how I will add income ,sales discount opening balance ? my university give me a trail balance sheet

[@QbuniversityOrg]

Well if you do an invoice and set up items then that will create the income

[@sosiamul]

Please 🙏 if you can check your QuickBooks university Gmail account and give me a short reply

[@zerihunmekuria5954]

Hi Thank you very much for your interesting class ! it was very helpful. thx u again

[@QbuniversityOrg]

You’re welcome!

[@dusty4960]

I transferred 24,000 from personal to business to open the account. Then paid two checks to a title company to buy two houses for 12,000 each. When I do my P&L statement it subtracts both 12,000 checks as an expense but doesn’t add the 24,000 initially deposited. So it’s showing I have a negative net income of -24,000.

[@QbuniversityOrg]

That’s because the $24,000 is an owner investment in the business, not revenue. Also just fyi buying the houses is not an expense you can deduct, it’s a fixed asset you have to depreciate, depending on what the house is for

[@sayedkhalid8922]

Thank you very much, A hotel bill dated 2019 is posted in quickbooks, its refelcting directly on balance sheet with negative balance. Whatsoever no balance was added in equity, how will it be recorded in this period 2020. Still no any closing or auditing has taken place since i use quickbooks

[@mjhult]

It sounds like it was entered as a credit. Where does it show on the balance sheet negative? As an asset or liability?

[@KamalNathatwill]

For accounts payable , I want to post the closing balance from 2018 to 2020 separately. What should I do , Did I do it correctly as a journal entry

[@QbuniversityOrg]

Feel free to leave a comment here!

[@megharanjan8942]

Sir in my accounts the inventory assets are not match in previous year how can i correct this

[@margelynch]

Thanks for the clear instructions. How about when the owner change the business type from Sole proprietorship to partnership (LLC) in April of the following year? What adjustments or transactions take place?

[@QbuniversityOrg]

None actually. The business just continues as it had been. Only difference is now there is more than one owner

[@robwin0072]

You have Purchase Orders and Inventory on your home screen business flow map; can I get those in QuickBooks Pro Desktop 2020? If so, which Business Industry should be selected when creating a company?

[@QbuniversityOrg]

You probably need to turn them on in Preferences. Go to Edit and Preferences and you should see the option under Items and Inventory

[@robwin0072]

@@QbuniversityOrg You are correct. Stay Safe. Kind Regards.

[@sant3311]

Matt, can you do a tutorial on how to handle ATM machines and QBO? This is for retail shops that have ATM machines for their cash customers. Thanks!

[@QbuniversityOrg]

San T yeah is this where you put money in the ATM then get it back with a fee?

[@dowdfamilydentistrybookkee1108]

I have searched and cannot get a clear answer. When setting up chart of accts. for beginning this quarter (2nd Q) April 1 (3/31)... where do I enter the balances of the "expenses" & "income" that my accountant has sent to me on their report for 3/31. I have entered the Assets, Liab, equity but it is not clear why I cannot enter the income and expenses. Obviously, am not an accountant. LOL

[@QbuniversityOrg]

The trial balance actually will not show those balances. It only shows the balance sheet accounts and all of the PL accounts are encompassed in Retained Earnings. To see what it looks like with the accountant 3/31 amounts pull up a PL

[@auraldegonzalez9331]

Can you help me with a bank information that I already have for 2020 ,How I can do a opening balance for same account for 2021,Thanks

[@QbuniversityOrg]

If it’s already set up as an account in 2020 you do not need to set it up again in 2021

[@auraldegonzalez9331]

@@QbuniversityOrg Thank You

[@QbuniversityOrg]

@@auraldegonzalez9331 welcome!

[@gabrielchristopher9363]

Good afternoon Sir. Seeing this video makes me think if I did the right thing. When starting my QuickBooks file, I got to a stage it asked for my opening balance which is not even the chat of account stage. Having done this, QuickBooks setup the default Opening balance equity account. This account shows the mark of a reconcile account. Now is it appropriate for the money to remain in the equity account or am i suppose to move it out of the opening balance account? Thank you in anticipation

[@QbuniversityOrg]

I would move that to another equity account, preferably Retained Earnings

[@gabrielchristopher9363]

@@QbuniversityOrg Thank you so so much. Am very grateful sir.

[@crisss2011]

Hi Thank you very much for the information! It was very helpful. I closed my account as a sole proprietor and opened an account as an S Corporation transferring the money from the sole proprietor account. How can I register the transaction? I don't have the other account to show the transfer. I will appreciate your help. Cristina

[@QbuniversityOrg]

Well what you need to do is enter the entire ending balance sheet of the sole proprietorship before you became an s Corp. this would be the best way to do it. It gets somewhat complicated but you do it by using a journal entry

[@petuniapearls8133]

am looking for help with inventory set up, if its inventory which account should i use to remove my balance from the opening balance equity which is a plug account

[@QbuniversityOrg]

In reality you need to know where the inventory came from. In other words if you already had an inventory balance how did you get it? Did the business pay for it? Did you own it personally and put it in the business?

[@alexiswarnking5495]

My quickbooks account entered the opening balance equity automatically and now I'm unsure of how to allocate and categorize those funds correctly. I want to be able to show the deposits (income) and costs of goods sold (checks going out) on my balance sheet. Do you have any tips for how I would go about doing that without messing up my quick books bank balance?

[@QbuniversityOrg]

The easiest way would be to do a journal entry where you reduce the opening balance equity and allocate it out to the specific costs that it represents. This can get a little bit complicated if you are not familiar with journal entries

[@fayahanna9161]

I set a money market account, I transferred money from checking to this account . I did not enter an opening balance when creating the account, I have the balance mentioned in "Chart of Account". so far all good except when I tried to reconcile for the first time , beginning balance is Zero. please advice what should do?

[@QbuniversityOrg]

The beginning balance should be zero and your transfer should show as a deposit to check off in the recon

[@lamiaaitbouskri278]

I did this befor always go to help page of quickbook desktop it will help. What I did is I did mini reconciliation with this 100 dollars as beginning balanca of the next month and ending balance for the previous month.

[@jcake9462]

is this needed if you connected quickbooks to your bank using the automatic feature

[@QbuniversityOrg]

Jcake not if it’s a newer bank account that you just opened since the opening deposit will download. Usually banks will only download a certain amount of time back so you may need to enter the opening balance

[@brianmills9417]

After using the opening balance equity method to adjust an account. What would be the next step when you want to take that amount out of the opening balance equity so that my balance sheet is correct?

[@QbuniversityOrg]

You would have to do a journal entry to move it out to the individuals equity accounts

[@brianmills9417]

@@QbuniversityOrg could you elaborate on that more please

[@QbuniversityOrg]

@@brianmills9417 yeah so opening balance equity is kind of a plug account where opening account balances go. It is supposed to represent owners equity in theory. So you could move the balance to an Owners Equity account by doing a journal entry

[@brianmills9417]

@@QbuniversityOrg Thanks, So I set up a new bank account and stopped using the old one in QB. I made it inactive, but it still shows up on the balance sheet how do I get it off of there.

[@meypuim2951]

Hi is the statement ending balance the opening balance in the bank statement or is it the ending Balance?

[@QbuniversityOrg]

It’s the ending balance

[@meypuim2951]

@@QbuniversityOrg are you sure ..I saw another video where she said even though it says ending balance, you have to type in the opening balance in the statement

[@meypuim2951]

@@QbuniversityOrg sorry let me say this again....I'm trying to enter bank transactions from a bank statement...but when I create an account for a bank, it says opening balance...when I click on it, it then says statement ending balance....and you have to enter an amount....so for this amount, is it the beginning balance or ending balance on the bank statement

[@QbuniversityOrg]

@@meypuim2951 ah yes then it is the beginning balance

[@meypuim2951]

@@QbuniversityOrg thank you for such quick responses

[@lindag5076]

I’m thinking about changing from my QB pro plus desktop to Online. My daughter and I are both users and with the wireless router ( offices are on different floors of home) thinking we wouldn’t have so many issues . Do you teach OnLine QB ?

[@QbuniversityOrg]

LINDA G yes I do have a playlist on my channel with just online videos. I also do have full tutorial training on QBO on my website at qbuniversity.org

[@robwin0072]

@@QbuniversityOrg if your are in the same location - one would think a home LAN (wifi of by network cables) would be better if your skills are on QB Desktop?

[@QbuniversityOrg]

@@robwin0072 could be. I think it depends on the business too. But if you are determined to use QBD then yeah that would be best