PDA

View Full Version : Set up accounts wrong Help Please


j123
08-04-2004, 08:12 PM
When we set up Q/B in Dec/02 jan/03 we used the open balance equity account to set up our customer and venders. Not to mention a few other accounts, how can I get these out of there. What a mess PLEASE ANY SUGGUESTIONS!!!!

Pam

qbsrox
08-05-2004, 08:25 AM
Pam,

The Opening Balance Equity account in QB's acts as a clearing type account .... or the 'other side of the entry' when you are setting a new company up.....so it is working the way it is supposed to.

You will need to make a JE to reallocate those distributions. Without more information it is hard to say exactly where the entries should be posted to. However, the 2003 totals may need to go to Retained Earnings.

Good Luck,
Rox :-)

j123
08-05-2004, 03:31 PM
thanks.

There is A/R and A/P in this account, and the way we set up all these customer and venders were we created an invoice or entred a bill and for the item we used the the open balance equity account. Did we do the set up right or wrong.? I know that we should of put the balance in where you set up new customer or vendors, but what I think our problem at the time was that we wanted to list in there accounts the number of invoices and or bills that were o/s, not just a lump sum. OH Boy!

thanks Pam

Perhaps These need to be moved to uncatoized expnses and income account? What do you think?

Joey
08-06-2004, 02:28 PM
Pam, if you put your year end balances for each customer and vendor into their A/R and A/P account with the offset to OBE, then you did just fine. If you did it by entering invoices and bills dated in the prior year, that's perfectly OK also. If you look at your A/R and A/P accounts for January 1, are those balances correct before you enter any current year sales or purchases? If so, then the Opening Balance Equity balance needs to be closed out into the Retained Earnings account with a Journal Entry dated 12/31 also.
While you're at it, you need to do the same with your beginning checking account balance. You enter the ending CLEARED balance from your 12/31 bank statement as the beginning balance and then create all the outstanding checks and any outstanding deposits with their proper dates so they will be there to check off when you reconcile the account. These also need to go to the Opening Balance Equity Account. That is what this account is used for. To hold these balances until you're finished. Then you close the OBE account into Retained Earnings.

j123
08-06-2004, 05:55 PM
I understand what your saying, and I don't. I printed the Open Balance Equity account, and there is twelve pages. When you click on the first A/R customer in this list, and the invoice appears and I check the journal, it says debit recivable and credit OBE and the amount is 0. If I put this in Retaining earnings, are we not just transfering the amount into this account and still have the same effect on my B/S.? Just wondering

Thanks again for your reply

Pam

Joey
08-07-2004, 10:10 AM
I don't follow you. If the amount is zero, there is nothing to move.

j123
08-07-2004, 04:36 PM
Sorry!

What I mean is when you are in the register for Open Balance Equity, and I click on the first line in the register which happens to be a invoice for A/R. The balance for that invoice is 161.00. If I go to the top of the invoice and click on the journal button, the Journal says Debit A/R 161.00, and credit OBE 161.00 then the balance is 0.

Does this make sense?

Pam

Joey
08-08-2004, 11:14 AM
The point is, what is your "total balance" in the Opening Balance Equity account now?

j123
08-08-2004, 01:05 PM
My balance in this account is -21319.40

Joey
08-08-2004, 01:08 PM
Did you have a Trial Balance from whatever old system you used for your books for 2003? What tax return do you file?

j123
08-08-2004, 04:07 PM
When we set up Q/B, our numbers from our Trial balance from the old system match exactly to everything we put in. Our accountant does our taxes. We have not filed 2003 yet because we have these question that need to be cleared up first.

pam

Joey
08-09-2004, 09:57 AM
Go in and create a new Trial Balance report for 12/31/03 and see if the balances still agree with the 12/31/03 Trial Balance. They must BOTH be on the Cash or the Accrual Basis. Use the one that matches your tax return basis.

j123
08-09-2004, 03:01 PM
Ok I will try that. We are on a accrual basis. I am to assume that both these trial balances should match? If not then what?

I hope you know that I very much appreciate all the time you are spending helping me with this matter.

Pam

Joey
08-09-2004, 03:52 PM
If not, then you need to find out which accounts changed. You said that they agreed with the trial balance at one point. If you're on the accrual basis, then the trial balance had an amount for Accounts Receivable and another balance for Accounts Payable. You should have not entered any balance in these accounts and, instead, entered the A/R invoices charged to OBE. The same for the A/P bills. Don't enter any total, just enter the bills charged to the OBE account.

j123
08-09-2004, 06:10 PM
Thats what we did. We entered every A/R, And A/P invoice in and used the obe for the account. My totals by the time I put all these in (Took forever), my totals match with what was on the old Trial Balance from the old system. Every thing did. But I still have to check to see if it still matches. Worse case senorio if it doesn't then what? If it turns out to be fine, then where would that leave us?
Are we getting closer to clearing this up?????

Pam

Joey
08-10-2004, 09:53 AM
If everything matched the old Trial Balance, then the stuff in the OBE got there later. The system goes by dates. Look at a trial balance for the same beginning date and see which balances changed.

j123
08-10-2004, 03:50 PM
I mean that when we entered the opening balances to all our accounts, we used the trial balance from Dec 31 2002, and when we were ready to use Q/B all the balances that were required matched to what the trial balance said. Now when I did a Trial balance dated for Dec 31/2003 some balances match and some don't.

Pam

Joey
08-11-2004, 09:30 AM
Is your Retained Earnings balance correct? The 12/31/2003 RE balance should agree with the prior years' tax return because it doensn't change until January 1, 2004 when the 2003 income and expenses close out.

j123
08-11-2004, 01:52 PM
I will check that. If it doesn't match what next??

Pam

suzannemead
08-11-2004, 03:10 PM
Pam -This may be a stupid question, but I am getting more confused by the minute. I got the impression from your last post that you are saying the trial balance as of 12/31/2002 and 12/31/2003 don't match.

j123
08-11-2004, 05:49 PM
I am just as confused as you are. I know that they did balance when we first started. We would not of continued until everything matched. Why they don't now, is just as confusing to me. The account did ask me to put thru some adjustments from after doing the year end for 2002 so maybe that could be why, but honestly don't know.
I guess I should just leave this account to our accountant and see if he knows what to do with the total in the OBE account. From my understanding when I talk to Our Q/B support, I am to do nothing with it. As long as my Balance sheet balances, he says Im ok. People tell me different answers about this account. Don't know what the right one is. I guess I will learn thru trial and error.
Thanks for all your help and imput. I don't always expect to get an answer from this forum. But your dedication to my question is wonderful. Thanks for trying.

Pam

suzannemead
08-11-2004, 08:56 PM
If you are expecting the trial balance to match from year to year, it shouldn't. The transactions you enter change each account. Is it the "Open Balance Equity" account that doesn't match, or all of the accounts?

j123
08-11-2004, 09:22 PM
What should my OPEN BALANCE EQUITY Account balance too?

Maybe it would help me more if you could explain it from your point of view how this account should be, what should be in it and how I should understand it, and how it soppose to be used. And I guess what you are soppose to do with it at year end or maybe thru out the year.

From a previous answer in the beginning, I believe he said that it acts as a clearing account or the other side, meaning to me that you need a debit and or a credit so this would provide it, and the account we are using is Open Balance Equity instead of some other account called maybe "office supplies." The book I reading also says that you can only transfer these amounts into another equity account.

Pam

suzannemead
08-12-2004, 07:39 AM
Could you check my last few posts & let me know the answers to the questions I asked there. It would help to know those answers as this is getting more confusing as we go on as I think there are more than 1 issue involved.

Joey
08-12-2004, 10:28 AM
Pam, the balance in the Opening Balance Equity account should be zero. It is a holding account only. QuickBooks is a double entry accounting system so every Debit must have an equal Credit. When you are entering your original balances into the program, the books must always have equal debits and credits as you enter those beginning balances from the Trial Balance. You will be using more than one journal entry to get those balances in there. That's because, for example, the A/R can't be entered as one number from the Trial Balance. That total from your Trial Balance is entered as a smaller beginning balance from each customer's beginning balance that you entered on their setup screens or if you created actual invoices instead for their beginning balances. The total of all those customer balances should have equaled the A/R total on your Trial Balance.
The same goes for the A/P balance. It's also entered as a beginning balance on each Vendor's account that made up the Trial Balance beginning A/P balance.
That means that while you are entering all this stuff, the debits and credits in the G.L. were not equal and there had to be an offsetting entry somewhere to keep the books balanced. That is what the entries to OBE are for. Once all the Trial Balance amounts agree, the OBE account should be zero again. Does this help you?
If you purchase a vehicle with a loan for $10,000 to pay for it and create a long term liability account, AFTER your books have already been set up, and you use that beginning balance area on the setup screen to enter the original loan balance, you just caused the loan balance to go to OBE in error. That's because you entered a liability (credit) amount without an offsetting asset (debit).
The correct way would be to make a journal entry to Debit Vehicles (Fixed Assets) for the $10,000 vehicle you purchased and credit L/T Liability for the loan to purchase the vehicle $10,000. You see, nothing is in OBE because the entry balanced in the first place.
You should never use that beginning balance in the account setup area after your books are already in use. That's only for transferring existing balances into QuickBooks.

j123
08-12-2004, 07:54 PM
Suzanne: My trial balance for 12/31/2002 does not match with my trial balance for 12/31/2003.
You also wanted to know if it is MY OBE account that doesn't balance. I don't know what it soppose to balance too? Or what reports do I need to look at to see if it is correct.

Joey: I am going to read your answer very closely and see if I understand everthing you tell me. I just don't see the picture in my head on how this account needs to work.

Suzanne hope I answered your questions you wanted me too.

Thank you both

Pam

suzannemead
08-12-2004, 08:49 PM
Pam - Your Trial Balance Report as of any date should show the balance in each account as of that date, therefore it would not show the same amounts on dates 1 year apart, unless you did not enter any transactions for the whole year. You Open Balance Equity account "should" show a zero, but sometimes amounts get entered in that account that will change it. For instance, if your bank statement doesn't balance when you do your reconcilation, the difference might be put in the Open Balance Equity account. As Joey said, that is not an account that you should be using for everyday entries. As you said in an earlier post, you do need a debit & credit entry for everything, but you should be using the appropriate account. You mentioned office supplies - if you purchase office supplies with a check, for example, you would Debit office supplies, an expense account, & credit Checking Account(or whatever name you call that account). The Open Balance Equity account would never be used.

j123
08-12-2004, 10:07 PM
Suzanne: Your right about the trial balance. There are some amounts that do match still because there have been no transaction put thru. Example would be the deprciation accounts. They still match. The accountant will let me know what J/E will be need. Etc. I never use this account. We used it only during set up of Q/B. Like I said before, we entred every invoice and A/P individually into Q/B. I know that all entries from these invoices and bills, the final total had to match the A/R, A/P total balance.
Once all the accounts were set up, I never even thought about this account. Now I do know that there are 3 entries that were made that went to this account in Oct/2003, but I did not know they were in there until now. I had to enter 3 new items to inventory, and I must of not chosen an account or something because they are in there.
Anyways, am I soppose to add up all the A/R and A/P and do a journal entry from the OBE account into A/R and A/P? And if so, am I soppose to do that do all other entries to there proper accounts?
Whats the right thing to do? I never use this account. Didn't really no it was there until this all came about.

Pam

Joey
08-13-2004, 08:45 AM
"Now I do know that there are 3 entries that were made that went to this account in Oct/2003, but I did not know they were in there until now. I had to enter 3 new items to inventory, and I must of not chosen an account or something because they are in there."

That's exactly what I meant. You used that Opening Balance area when you set up those new inventory items. You should NEVER enter anything in that area now when you create new accounts. Leave it blank. After setting up the item, it's beginning balance IS zero. It doesn't HAVE any balance until you purchase some of them. Then when you issue a check or enter a bill to purchase them, you put the amount into the account. So go back and DELETE the opening balance in those inventory accounts. That will also remove the amount from the OBE account at the same time.

j123
08-13-2004, 01:24 PM
Hi Joey
I fix those inventory items. Deleted them out and reset them up the proper way. But that still doesn't help me with the rest of the stuff that is in this register.
I do understand that I am not soppose to use this account at all (not intentionally). I understand that if I can't reconcile any of my bank accounts or credit card accounts, if I allow Q/B to put an adjustment thru, it will go into the OBE account.
Now when we set up Q/B and used the OBE account to set up all of our accounts did we use it correctly? And if you say "yes we did", then this is where I get confused as too why there should not be a balance in this account and or how are we soppose to bring it to a zero balance.

Pam.

I am just reading your explanation, so I gather that by the time we entred all our accounts, that we did not balance with the G/L and that is why all these accounts are sitting in OBE to make our books balance. Is that correct?

Joey
08-13-2004, 01:39 PM
Because you told me that you used your existing Trial Balance amounts. In a Trial Balance, the total Debits always equals the total Credits so if you entered all those amounts in the system, there is nothing left to remain in the OBE account.
If your beginning balances were entered correctly for 12/31/2002, then the balance in the OBE account as of 1/1/2003 should be zero. Anything in there after that needs to be fixed. Just like you fixed those 3 items. Delete them and re-enter the transaction correctly or find out when the amount should have gone and make a journal entry to reclass the amount there.

j123
08-13-2004, 04:20 PM
Ok Gotcha. Just one more thing. If a custmer makes a payment against one of those invoice that is in OBE account, and I recievie the payment thru the recieve payment window, and click the proper invoice, why won't it clear it from that account?

Pam

PS It says that you are in Florida. Is the huricanne hitting you where you are?

Joey
08-13-2004, 04:28 PM
When you go to Receive Payments, you apply the amount of the payment to the oldest invoice on that screen. It has nothing to do with the OBE account. The payment is reducing Accounts Receivable, not OBE.
Yep, I'm in Florida but I'm down South. Just above Miami. I think it's going above me tonite. (I hope)

j123
08-13-2004, 04:50 PM
I think I understand now. I will never use that account for opening up new accounts.

Could I just go into some of these transaction and change the OBE account to where they should be with out it changing anything that is reconciled or paid. Think I could do that without doing to much damage?

Pam

Joey
08-14-2004, 11:46 AM
You're not understanding what I've been trying to explain. The transaction where you put the original amount is correct, it's the offset to that transaction that you didn't post. That's the amount in the OBE account. You need to look at each transaction and see where it's supposed to be and see which side of the transaction is missing. For every Debit there must be a Credit somewhere else. And from what you've been saying, I don't think you're understanding the concept. You mentioned your checking account adjustments. Do you have them in that account?

j123
08-14-2004, 03:24 PM
Too me this is what I think you are saying. If the invoice in the obe account is a Debit to A/R then the OBE account will act as the credit. When I do A J/E to clear this out, I then would Debit OBE and then Credit the proper Account Do I have it? If I do I have one last request from you for and entry I did after our books were open, and I would like to see how I should clear that out of OBE. It is a real dousie.

Pam
PS. Very sorry to see all the damage from the storm. I have been watching it on the news.

Joey
08-14-2004, 03:35 PM
You've already said that your balances as of 1/1/2003 tie to the Trial Balance report. That means that those entries have already reversed back out to zero out the OBE account balance. You have to locate the ones that went into the account during the 2003 year and reclass them where they belong.

j123
08-14-2004, 04:05 PM
yes all those entries are fine. but there are a few entries that I did in there that were done in 2003. 3 of them were the inventory items, and I deleted them and re entreed them properly. And in 2003 I also let Q/B adjust my bank rec because something was not right. and I see that it is in there (I did not know until you told me that where those kind of entries go). Now I did do this one and like I said I'm not sure how you can fix it, or if it is something I need to leave.
I set up a credit card under A/P. Very long story as to why it was done this way. Anyways, I went into enter bill, and under the expense tab I used the OBE account to put the opening balnce too. Under the expense tab there are all the entries of what was purchased on the card going to there proper expense account. In the amount field is a running total. If you go into paybill, you will see the actual amount of the credit card that is due. How can I transfer all of this into a credit card account without loosing all the transactions and get it out of OBE. Im not sure what to do because there are the 2 totals. We don't really used the card. We mostly try to pay the balance down.
Pam

Joey
08-14-2004, 04:10 PM
Look at the register for the credit card and see if that balance shows up there on that date?

Joey
08-14-2004, 04:11 PM
How much was that OBE entry that was made when your checking account didn't reconcile?

j123
08-14-2004, 04:24 PM
The date of the bank rec is June 30 2003 for 402.95, and the credit card date is Jan 1/2003. This credit card was added half way thru 2003. (Told you long story as to why it was set up this way.) When I set it up I used Jan 1/2003

Pam

Joey
08-14-2004, 04:41 PM
For the bank reconcilement, you need to find out why you were out of balance for $402.95. Look in your checking account for transactions for this amount. Do you have an outstanding check that was never checked off or did you uncheck one later on?
For the credit card amount, you probably can make a journal entry to debit A/P (list the CC vendor in the name column of the je) and credit the OBE account for that amount since you said that the balance in the credit card account is ok.

j123
08-15-2004, 05:44 PM
Hi Joey
The bank rec is something to do with a transaction that got chaqnged, there fore it changed the opening balance to the bank reconciliation. Im not worried about that.
If I do a J/E like you said above, with the opening balance total, to get it out of OBE, but how do I get the actual total of the credit card to date into the credit card account without losing all the transactions that were entered into A/P, that goes along with the opening balance?

Pam

qbsrox
08-15-2004, 07:07 PM
Pam,

I am assuming you have the Canadian version....is that correct? It might be helpful if you did a Remote Session with someone so you are both looking at the transactions/file at the same time and discussing the issue. I have the US version, so I don't think I can do that....

Is it the Credit Card that is causing this last problem with OBE?

Maybe Joey can do a remote session......or even just take a look at a back-up. Sometimes if we can 'see' it, we can explain it easier.

Rox :-)

j123
08-15-2004, 07:17 PM
Yes, but joey already told me how to do the J/E to get it out of OBE, but, the way we set it up in A/P, It has two totals.
We set it up in enter bills, and under the expense tab is the opening balance which is the total in obe, and as well under the expense tab there is all the transactions to there proper accounts. Under the amount, there is a running total, and when you go to pay bill, you will see the exact amout your credit card is do. So I need to get the total out of OBE (by J/E) and put the final bill total to the actual credit card account. This is what I need to do.
We do have the Canadian version.

Pam

Joey
08-16-2004, 09:34 AM
I was trying to tell you. At this point, you already have the expenses correct. You told me before that your ending credit card balance is OK. You already have an amount in A/P that does not belong and you have the same amount in the OBE account. So that's why I said to Debit A/P and Credit OBE to clear the balances.
You still need to fix the bank transaction that got changed and then delete the balance adjustment from the OBE account also.

j123
08-16-2004, 03:22 PM
Joey:
well i guess that is it for your help. I think we have exhausted the question, and I believe I have a better understanding on how that account works. I will do my best to clean this up.
Thanks again. You have been so great and patient. I mean that.

Pam