Professional guide to Zero Out Retained Earnings in QuickBooks

Retained earnings are the collected end-of-year balances of your business. At the end of each fiscal year, once all the invoices have gone out and all the bills have been paid, the negative or positive balance for your business is transferred to a new account known as Retained Earnings in QuickBooks. Hence before closing your books it is suggested that you review and complete all customer invoicing, ensure that all expenses have been entered, complete the bank reconciliation, add taxes, verify that all other (asset and liability) accounts are correct and if accounting is done on the accrual basis ensure that all the necessary accruals have been made. In short zero out retained earnings in QuickBooks. 

We have brought you this blog to zero out retained earnings in QuickBooks without any issue. Professional help on the same can be availed by reaching out to the QB team on (800)417-5147

What are closing entries in QuickBooks?

Zero out your revenue and expense accounts by using journal entries known as the closing entries. Closing entries further transfers the balances of the temporary accounts to permanent accounts. For example, the revenue account is emptied into the retained earnings account.

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Check the expenses account for discrepancies

Before moving ahead with this procedure, we suggest checking that all the numbers are entered correctly. In case they are not, modify them so as to resolve the zero out retained earnings in QuickBooks application.

• Open QuickBooks desktop application from the desktop icon and move to the Chart of Accounts.
• Search for Income Summary. If you are not able to locate this option, then you need to hit on the Add Expense Account option.
• In a similar fashion, add the owner’s equity account as Retained Earning account.
• Move to profit & loss account report or Income statement.
• Filter your P&L account as a fiscal period to proceed further.
• Check and verify all revenue and expense account.
• Using the New Journal Entry Window, create new journal entries.
• Enter the date for the last day of the account closing date.
• Move ahead and again on P&L account, select all revenues and all the debit amounts.
• In the last line of the entry, click on the income summary account that you have created. Credit the total of all the revenue accounts.
• Hit on Save and Close to finish.

We conclude our blog at this very point on how to zero out retained earnings in QuickBooks. In case you are unsure of the steps contact QuickBooks Data Services team on (800)417-5147

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