I have recently taken over the treasurer position for a non profit club. When the previous treasurer set up the opening balances in quickbooks in 2007 he did an entry that debited the banks for roughly $39,000 and the credit to Opening Balance Equity, therefore when I run the balance sheet there is $39,000 sitting as equity on the BS. How do I fix this? This is not an equity, it was cash/savings account. Or am I wrong and it should stay there? I do bookkeeping as a trade and I have not ever come across any thing like this. Generally its shares that sit in equity, not cash.
Please help, I have 8 years of tax returns to file because they never did that either.

It's possible---though by no means certain---that it's OK as it sits. First, remember that cash or bank accounts, and equity accounts, are not mutually exclusive. On the contrary, they frequently go together as a pair, as two sides of the same coin.

When the members of a nonprof contribute cash (their dues, say), to the entity, the books show a simultaneous increase to both cash and equity for the contributed amount. Until those dollars are spent from the checking account on the nonprofit's expenses, they represent some equity that the members have in the entity.

If possible, determine where the 39K in the checking account came from. If any portion of it was borrowed (from a bank loan, say) then you'd need to have a loan payable account on the books reflecting that amount. Similarly, if some portion of the 39K came from donations by outside contributors, and earmarked for a particular purpose, then you'd need a liability account (rather than equity) to indicate those funds as encumbered for the given future purpose.

But to the extent the checking account balance came originally from members, and represents members' contributions that hadn't yet been spent on the nonprofit's affairs, it probably does indeed represent equity.

Thank you ArcSine. I do understand what you are saying however this money came from various sources. In 2007 they stopped using a different accounting system (a rather archaic one) and implemented Quickbooks. As far as I can tell they just did not set up the opening balances correctly (ie: from a trial balance). Our club does collect membership fees however we also have wedding rentals and sales income from our banquets and picnics. This money is what was managed to be saved over the years. The majority of it ($33,000) is what was sitting in an ING account. By 2009 they had spent $10,000 from ING. It currently sits at $22,000 and change. Since they haven't filed their corporate tax since 2006, I am tempted to clear it to Retained Earnings on January 1, 2007 (much to my dismay as I do not like backdating, however with quickbooks you are able to). Any opinion on this? I am now required to file 8 years of Corporate tax by the end of next month and I want the books to be correct.

Can you get your hands on either the tax returns for one or more years immediately preceding 2007, or the checkbook register (and/or bank statement copies) for such time? From these it might be possible to at least estimate the composition of the 39K.