QuickBooks Equity - What is Opening Balance Equity?

Opening balance equity is a special account that you should only use during the setup of QuickBooks or QuickBooks online. Any time you input a beginning balance in another account in the chart of accounts, or input the balances of customers, vendors or inventory, then the balancing effect will change the balance of opening balance equity for each starting balance that you enter. You need to know how to adjust the opening balance equity account. You will see how it helps set up the QuickBooks desktop file or set up a new QuickBooks online account. You will see how it helps input beginning balances and how it serves a special function to balance the accounts when you set up and input beginning balances in your chart of accounts. After the set up, you can distribute the balance of opening balance equity to the partner’s capital investment account by making an opening balance equity adjusting journal entry.
This KZbin owner’s equity playlist will show you everything you need to know about owner’s equity. Owner’s Equity in QuickBooks and QuickBooks Online involve equity transactions and owner’s equity accounts, in order to properly show the true amount of ownership claim or ownership rights an owner has in a company using QuickBooks desktop or QuickBooks online. I’m happy to show you what is owner’s equity and what the official definition of equity really means. After you are clear in the explanation of owner’s equity ideas, you will learn about the owners’ equity accounts in any company’s general ledger. You will learn, in the QuickBooks desktop or online chart of accounts, the equity type of accounts that both will automatically put in your chart of accounts. In QuickBooks desktop, the equity accounts given depend on the company type. In QuickBooks online however, the default equity accounts depend on your subscription level. You will always have in either: opening balance equity, retained earnings and the equivalent of owner’s capital investment and owner’s withdrawals. All the other equity accounts will be added based on any changes you make. I will help you learn how to make owner’s equity transactions like investing cash and assets or withdrawing owner’s draws or dividends in any cash or asset form. The playlist will show you all about monthly equity adjustments such as: distributing partnership income, closing the books, closing entries and income summary adjustments. Watching this QuickBooks equity course will give you everything you need to know about owner’s equity. Please watch all videos to know how to record all owner-related transactions where money or assets are coming to or from the owner as capital investment or owner’s withdrawals like dividends if it’s a corporation. Once you understand owner’s equity ideas and equity-related concepts, everything else in basic accounting is easy.
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[@worldwidequickbooks]

Thank you, all my friends, for the lovely complements!! This is America’s #1 explanation of Opening Balance Equity! It is a special account that we need only at the beginning to be able to set up balances in QuickBooks or QuickBooks online. You will clearly see how it works and it will make the rest of your QuickBooks set up really easy. There’s a link in the description to the set-up QuickBooks playlist for all information about setting up start up numbers and beginning balances in both QuickBooks desktop and QuickBooks online. I hope you will “like” after watching each one and I hope you will subscribe. -Mark

[@markskipper2199]

6 months into our fye 6/30/22, we switched to QBO. I just took a 12/31/21 balance and keyed a big journal entry with a 1/1/22 date. (No A/R or A/P). Now I go to do the first bank reconciliation on QBO and I have a zero balance balance in my beginning bank statement

[@worldwidequickbooks]

Thank you Mark, The exact knowledge you need for this is in this playlist. kzbin.info/www/bejne/iH-2pX1vjrajq9U I suggest you watch it IN ORDER. Then you will know exactly what to do to make set up numbers. Then, for bank reconciliation, you can watch the full bank rec playlist and this specific video will show you how to handle first month issues. kzbin.info/www/bejne/bJq3loKsbLhgpaM If you need bank rec for desktop, please let me know. -Mark

[@adilsom3626]

Thank you, always i got the solution i need from your videos

[@worldwidequickbooks]

Thank you so much! I’m happy to help. I hope you will click “like” after the ones you watch and I hope you will subscribe. -Mark

[@Meisam.Safari]

Very helpful, thank you for sharing!

[@worldwidequickbooks]

I'm glad to help. I hope you will click "like" and subscribe

[@corimehnert4853]

Very helpful, thank you!

[@worldwidequickbooks]

Happy to help and it's good to hear from you Corey

[@florencemarcelin7068]

How can I put the information for opening balance of a busines who I started in 2018, and I started to use quickbooks in 01/01/2021?

[@worldwidequickbooks]

Thank you Florence, So sorry I did not see your question until now. Here is a playlist that teahes the ideas behind set-up numbers kzbin.info/www/bejne/iH-2pX1vjrajq9U Again, I hope it's not to late but it will give you what you need and you can ask me follow-up questions. I will now respond quickly now that I have fixed my KZbin issues. -Mark

[@dexol4784]

Thank you, always got the solution I need from your videos. Kindly, I am planning to use QBO in my business. As part of my business, I have to create assembly units by opening physical Job cards and taking some raw materials from inventory, creating the Assembly unit, and writing new part number in the assembly unit same as the serial number of the Job Card that I used then I add the assembly unit in inventory. So, is there a way to use QBO to do this process? if not what do you advise please?

[@worldwidequickbooks]

Thank you but only quick book's desktop has the assembly's unit you will not be able to do that with quick books on line Mark

[@markskipper2199]

6 months into our FYE 6/30/22, we changed our software to QBO. I pulled a trial balance at 12/31/21 off the old system and keyed a big journal entry (dated 1/1/22) to bring our balances into QBO. I go to do the first bank reconciliation in QBO, and see I have nothing in the beginning bank balance. Yet the g/l has over $48K in it. How do I get the correct beginning balance in the beginning balance per the bank statement without screwing up the correct g/l balance?

[@worldwidequickbooks]

Thank you Mark, The exact knowledge you need for this is in this playlist. kzbin.info/www/bejne/iH-2pX1vjrajq9U I suggest you watch it IN ORDER. Then you will know exactly what to do to make set up numbers. Then, for bank reconciliation, you can watch the full bank rec playlist and this specific video will show you how to handle first month issues. kzbin.info/www/bejne/bJq3loKsbLhgpaM If you need bank rec for desktop, please let me know. -Mark

[@impactodelsurenterprise2440]

If I lump all my fixed assets in one opening balance entry, does that mean I cannot track the depreciation expense of each individual assets in the balance sheet?

[@worldwidequickbooks]

You can record things the way you like. sometimes large companies lump all FIXED assets in to 1 account and keep a separate schedual of individual assets and their respective depreciation. Usually small busines sowners don't bother putting in depreciation in to quickbooks. They just use QuickBooks to operate and the tax accountant keeps the depreciation records and adds them to what you submit from quickbooks so thye can do your tax forms. -Mark

[@camillecarter9164]

How would you add an opening balance for property tax that was paid the previous year?

[@worldwidequickbooks]

Thank you Camille, So sorry I did not see your question until now. Here is a playlist that teahes the ideas behind set-up numbers kzbin.info/www/bejne/iH-2pX1vjrajq9U Again, I hope it's not to late but it will give you what you need and you can ask me follow-up questions. I will now respond quickly now that I have fixed my KZbin issues. -Mark

[@craftykid6670]

U r best

[@worldwidequickbooks]

Thank you very much and I hope you will click like and subscribe Mark

[@smruti3054]

Can we withdraw equity opening balance?

[@worldwidequickbooks]

For what?

[@smruti3054]

@@worldwidequickbooks my equity holding show 1,75,381.80,what is this??

[@lenlinglei]

hi I have a question about opening balance equity. We have long term loan put in opening balance in equity in 2018 as we first time set up it in quick books. We finished the repayment in2021. The point is that there are some figure still show on opening balance equity. Do I need to closing it? If yes , what should I do

[@worldwidequickbooks]

Your question is an accounting question, not a quickbooks functionality question. It seems you were not set up by an accountant. It does not make sense to me that a loan is "part of owner's equity". I don't really know what that means. A loan should have its own liability account. Opening balance equity is explaind here. They are 2 completely different things. If you made big mistakes in your opening balances, then I can only advise that the knowledge you need to do it correctly and the knowlege you need to possibly be able to fix it is in the FULL PLAYLIST of this video: kzbin.info/www/bejne/bWHEpWCEeL6toKc And there is a special playlist specifically for set up numbers to see how you should have set up. kzbin.info/www/bejne/iH-2pX1vjrajq9U I assure you that these 2 playlists will clear things up enough. You can ask me follow up questions after watching. -Mark

[@lenlinglei]

Hi Thank you for your reply. I give you an example to let you understand that what I said. ABC company starts business from 2010 to now -2021. Year 2010-2018 do account by menus. We got quick books in 2018 and we key in the figure in quick books .what I mean was we put the figure from 2018 to now . That mean is first time key in figure and set up it. But balance sheet(2018) include loan form bank. Because first time to set up in quick book and we put the loan into opening balance equity. Am I right? But now , we finished repayment the loan and it is zero. Liability do not have long term loan until now. The point is - opening balance equity include the figure form loan in 2018 and still show on in opening balance equity . Do I need to settle it?

[@worldwidequickbooks]

@@lenlinglei I am sorry but I cannot read all that. Since the hardest part of my job is understanding a situation, I can only answer general or quick questions here on youtube. I would need a seson with you to understand your situation. The easiest part of my job is explaining what to do once I inderstand the question. You can email to me at [e-mail] -Mark

[@lenlinglei]

@@worldwidequickbooks I sent email to u. Thanks

[@johnnytarkpah6782]

@@lenlinglei The first mistake was that you credited an amount that should have gone to a liability account, into an equity account. You will now need to create an adjusting entry to remove that amount from the equity account to the appropriate loan liability account. Since the loan has been paid off and has a zero balance, you will then debit that loan liability account and credit the appropriate account to finally bring the loan account to zero balance.

[@markskipper2199]

Why not just take a trial balance from the converting books and creat one big AJE to record all the opening balances for QB!

[@worldwidequickbooks]

Yes!! That's the idea. That's what the "set up" playlist is all about!! You will love this playlist........... kzbin.info/www/bejne/iH-2pX1vjrajq9U I hope you will clcik "like" after watching each one and subscribe. -Mark

[@AngularWithTehseen]

Great Man

[@AngularWithTehseen]

@@worldwidequickbooks done

[@worldwidequickbooks]

Thank you , glad I could help