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• # 98592
• Sat 29 Mar 2014 08:16 PM

Whilst waiting for my L2C results, i'm trialling QuickBooks Pro. I'm very impressed with the software, i'm finding my way around it with the help of some reading material and working through a mock paper I completed on Sage 50 Accounts in the lead up to my exam.

I could however, really use some advice in respect of how exactly I should be entering the customer & supplier opening balances. No matter how I try, I end up with the amount falling into 'Owners Equity' account.

I have tried entering opening balance whilst creating new customer record, I have also tried creating an invoice dated the last day of the last fiscal year. i've been Googling for hours & i'm none the wiser!

If anybody can give me a step by step guide to how to go about entering, for instance, a customer (Lord Patrick Groves - as the example on the mock paper) opening balance of £480, i'd be extremely grateful! I think i'm right in entering the other account balances with journal entries?

I've muddled my way through all the other tasks reasonably well, I really like the look & feel of QB Pro, and would definitely consider investing if I were to get my practice licence.

Many thanks in advance to anyone who can clarify this for me!

Linda 

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• # 98595
• Sat 29 Mar 2014 10:21 PM

Hi Linda

If it's only one amount that you need to enter as an opening balance, then using the 'Opening Balance' feature when creating a new customer or supplier is fine. If, as when working with a real file, you have more than one invoice that makes up the opening balances, it's always best to ignore the feature and enter invoices/bills as of the date they really are, therefore creating the debtors/creditors opening balance as you go along.

As it's opening balances that you're creating, these should be showing as 'Owners Equity' (sometimes also called Retained Earnings) as one half of the entry and debtors or creditors (accounts payable / accounts receivable) as the other half - this is correct, because the entry has already been reported to the P&L in its original form in the previous financial year, so all you want to get in the current financial year is the outstanding balance at the last day of the previous year end. 

So it sounds like your entries in QuickBooks are being done correctly.

When you're entering the rest of the Trial Balance journal - you take out the opening debtors and creditors figures, as these should be as per the invoices / bills you've entered, so you ignore this on your journal and in order to make it balance, you adjust the 'Profit and Loss' / Capital figure accordingly to match these - which all goes to the Owners Equity Account - All 3 are more or less different names for the same account!

I hope this helps and makes sense........it's difficult to explain after a couple of wines!! :-)

• Carol Saunders
  Lady of Ledger Book Keeping
  Telford, Shropshire

  
  

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• # 98597
• Sun 30 Mar 2014 05:54 AM

Hi Carol

Thank you so much for taking the time & trouble to explain this for me, I can't believe how much time I've wasted, trying to find answers on the www thinking i was doing it wrong! I appreciate that in a real scenario you'd have actual invoices to input, but for learning purposes, I didn't want to start out wrong!

I sometimes thing things become far clearer after a couple of glasses of wine, maybe that's the way forward!!! 

Thanks again!

Linda

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