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.
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.
It is very easy to view the Retained Earning 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 adding an entry to your General Journal check details after writing a check from Retained Earnings funds, you can mention this in the Retained Earnings account. Ensure that you save or record the details whenever you input new entry to make any adjustments to your Retained Earnings balance.
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:
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:
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.
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