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ciika · Jan 29, 2009, 04:51 PM

We started using Quickbooks Pro in Jan/08. I entered the opening balances for each customer that we had for 07 at that time. During the year customers paid those balances and now it is sitting in uncategorized income. How do I go about moving that so that it doesn't effect our current years balance sheet/profit and loss statements?

Thank you for any help. I should know this but seem to be drawing a blank!

codyman144 · Jan 29, 2009, 10:23 PM

Originally Posted by ciika

We started using Quickbooks Pro in Jan/08. I entered the opening balances for each customer that we had for 07 at that time. During the year customers paid those balances and now it is sitting in uncategorized income. How do I go about moving that so that it doesn't effect our current years balance sheet/profit and loss statements?

Thank you for any help. I should know this but seem to be drawing a blank!

Here we go… Just another reason why I cannot stand QuickBooks:mad:; I know why people use it, because it is so easy to use, cheap etc but it just makes it way to easy to mess things up without realizing it.

My guess without being able to look at your books is that when you entered in the customers balances (A/R) from 2007 that the system (QuickBooks) thought that it was all new revenue of 2008 and because it wasn’t associated with a revenue account it put it all in uncategorized revenue. Therefore when it creates financial statements for you it is including that revenue in 2008. Furthermore (and what really kills me about QuickBooks):rolleyes:, it took that income and to make your balance sheet balance automatically assigned it to retained earnings.

What you need to do to verify this is to run detail reports of your revenue in 2008. If it is calling the prior A/R balances inputted revenue than you have probably overstated your income for the year.

Another way to verify this is to look at your retained earnings account at the end of 2007 and then what QuickBooks is telling you at the end of 2008. Then you need to go line by line through your 2008 P&L detail and make sure it isn’t including the prior A/R balances as 2008 revenue and or RE. One good feature about QB however is that you can double click on any line on the financial statements to see the detail of what is included in that number.

Try these things and let me know what you find then I will tell you how to correct it. Or if you have more questions on this let me know.

ciika · Jan 30, 2009, 11:59 PM

I did go through the P&L line for line and did not see any of the opening balances in it.

Actually I went to go and check the exact amounts on what was the opening balances but they were gone. I am doing the books from home tonight so I'm not able to double check the retained earnings at the moment. I did try clicking on it to see if I could get some more details on it but there was nothing.

I am thinking it may have moved it to the retained earnings already? They have a Dec 31st year end.

Thank you again for your help!

codyman144 · Jan 31, 2009, 12:11 AM

Originally Posted by ciika

I did go thru the P&L line for line and did not see any of the opening balances in it.

Actually I went to go and check the exact amounts on what was the opening balances but they were gone. I am doing the books from home tonight so I'm not able to double check the retained earnings at the moment. I did try clicking on it to see if I could get some more details on it but there was nothing.

I am thinking it may have moved it to the retained earnings already? They have a Dec 31st year end.

Thank you again for your help!

Did you close the 2008 accounting year yet in QB?

Look at the P&L does the uncategorized income show up there? If so does it equal the sum of the A/R balances inputted when you started using QB? If that is true then you know what happened, it added it to 2008 income...

Also verify the retained earnings test I talked about before please (although I know you cannot do this now). Are you good at doing account reconciliations? If so just rec Retained earnings from 2007 all the way through the end of 2008

We will get to the bottom of this I promise you that.

ciika · Jan 31, 2009, 12:36 AM

Okay so I went in and did a Prev year comparison P &L and found that it took the opening balances amounts (Well the A/R - the A/P) from "2007" and moved it to the retained earnings for "2008".
I haven't closed the books yet. I will double check the retained earnings from last year when I get in the office though.

THANK YOU!! I thought I was going crazy and you are a god send!

codyman144 · Jan 31, 2009, 12:41 AM

If you need help to do the correcting J/E let me know.

ciika · Jan 31, 2009, 12:56 AM

I would love your help. I'm great with the basic and somewhat beyond. But I get paranoid with retained earnings.

Hmm I wonder if they have a name for a fear of accounting retained earnings/assets etc.
Perhaps Reearnassphobia?

codyman144 · Jan 31, 2009, 01:39 PM

J/E should be easy.

Clear the balance in the unspecified revenue account (Credit) and offset to retained earnings (debt). Also what did it do with the A/P balances you inputted, put them to Unspecified Expense :rolleyes: If so just clear that balance the same way but the debt and credit will be reversed.

Any questions?

ciika · Feb 1, 2009, 10:10 AM

Should I be setting up another account specifically for this to credit to offset the retained earnings?
And if I do that won't it effect my 2008 reports?
Or do I have my head around this wrong?

codyman144 · Feb 1, 2009, 10:24 AM

Originally Posted by ciika

Should I be setting up another account specifically for this to credit to offset the retained earnings?
And if I do that won't it effect my 2008 reports?
Or do I have my head around this wrong?

No QuickBooks incorrectly created these unspecified revenue/expense accounts and incorrectly included them in your retained earnings balance. You are just fixing what it did wrong. If you wanted to create a separate account I guess you could but I wouldn’t

You should however keep very good records of how you determined this problem, how you calculated the adjustment(s) necessary and why you are adjusting the accounts. This should be attached to a copy of your J/E and you should make an extra copy for you to keep. Those rules should apply for any J/E you do. Sorry if you already know all this but someone out there reading this might not...

ciika · Feb 1, 2009, 09:50 PM

Thank you! I did keep good records. Otherwise my accountants would yell at me. (with every right!) haha I lie, they are very nice. I would just feel guilty for causing them grief when I could have made everything much easier by keeping better records!

I have to tell you that I haven't had this many issues with either of the companies I do general bookkeeping for as I have with this not-for-profit that I'm volunteering doing!

Probably because of the banker-wanna-be-accountant that is driving me nuts about everything.

Thanks again for all your help. Very much appreciated!!