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<main id="content" class="site-main post-5554 post type-post status-publish format-standard hentry category-bookkeeping-2">

			<div class="page-header">
			<h1 class="entry-title">What is Opening Balance Equity and How Does It Affect Your Business? Huskey Practice Manager Blog</h1>		</div>
	
	<div class="page-content">
		<p><img decoding="async" class='wp-post-image' style='display: block;margin-left:auto;margin-right:auto;' src="https://www.bookstime.com/wp-content/uploads/2021/08/d851c8f817.jpg" width="255px" alt="what is opening balance equity"/></p>
<p>It’s a temporary account created during the initial setup of QuickBooks or any accounting system. Its purpose is to balance your books when entering opening balances for accounts like bank accounts and liabilities. As you enter opening balances for your assets, liabilities, and equity accounts, the OBE account offsets these amounts.</p>
<p><img decoding="async" class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src="https://www.bookstime.com/wp-content/uploads/2021/08/d0cf1e9e4c.jpg" width="258px" alt="what is opening balance equity"/></p>
<h2>Can I transfer the balance from the OBE account to another account?</h2>
<p><img decoding="async" class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src="https://www.bookstime.com/wp-content/uploads/2021/08/shutterstock_115791079-300x200.jpg" width="250px" alt="what is opening balance equity"/></p>
<p>Don&#8217;t hesitate to return to this forum or respond directly to this message if you encounter any further challenges with banking transactions or other QuickBooks Online tasks. We&#8217;re here to assist you with any aspect of <a href="https://en.wikipedia.org/wiki/QuickBooks">QuickBooks</a> QBO that you find challenging. Allow me to help you fix your negative balance in QuickBooks Online.  You have that account because it is an account QuickBooks creates on its own. The account causes some confusion as many people don’t know why it’s there and wonder if it has any use.</p>
<ul>
<li>In both business structures, it is important to keep track of any owner&#8217;s investments or withdrawals.</li>
<li>In a sole proprietorship, these transactions are recorded directly in the owner&#8217;s equity account.</li>
<li>Check with your tax preparer if the equipment was used when purchased.</li>
<li>Opening Balance Equity has been used as the offsetting account for our other initial account balances as well.</li>
<li>Right now, the books don&#8217;t even have a Chart of Accounts account called Opening Balance Equity.</li>
<li>In case the balances don’t match, it can lead to lingering balance, which can be cleaned up using software like Deskera.</li>
<li>Finally, if you&#8217;ve thoroughly reviewed your transactions and still can&#8217;t determine the cause of this issue, I&#8217;d suggest consulting a qualified accountant for assistance.</li>
</ul>
<h2>What to do if you didn&#8217;t enter an opening balance in QuickBooks Online</h2>
<p><img decoding="async" class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src="https://www.bookstime.com/wp-content/uploads/2021/06/c15cb2f2-4a6e-4f8c-ac63-0b99e09b1d06-300x200.jpg" width="251px" alt="what is opening balance equity"/></p>
<p>Utilize import, export, and delete services of Dancing Numbers software. Yes, you can move the balance from the Opening Balance Equity (OBE) account to another. Usually, this means you’ll transfer it to an equity account like Retained Earnings or Owner’s Equity. I appreciate your careful approach to resolving the discrepancies between your bank and QuickBooks Online&#8217;s (QBO) balance. We&#8217;re always available if you need more assistance managing your accounts in QuickBooks Online.</p>
<h2>Why Is It Important to Zero Out the Opening Balance Equity Account?</h2>
<p>We&#8217;re always available to offer further assistance with managing your accounts in QuickBooks Online. Remember, the Community is always available if you have questions about financial reporting or other bookkeeping tasks in QuickBooks Online. Your success with QBO is important to us, and we&#8217;re committed to providing the help you need to navigate the platform efficiently. Thank you for consistently engaging with us regarding your inquiries about the opening balance equity. I also appreciate the screenshot you&#8217;ve shared that shows the amount for this account in your Balance Sheet report. The correct equity account would differ depending on type of business entity.</p>
<div style='text-align:center'><iframe width='561' height='312' src='https://www.youtube.com/embed/cCphWYdA9tc' frameborder='0' alt='what is opening balance equity' allowfullscreen></iframe></div>
<h2>How can You Enter the Equity from the Opening Balance in QuickBooks?</h2>
<p><img decoding="async" class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src="https://www.bookstime.com/wp-content/uploads/2020/10/fica-tax-2020-visual-min-300x200.jpg" width="251px" alt="what is opening balance equity"/></p>
<p>The Opening Balance Equity account shouldn&#8217;t have a remaining balance. If your customers or vendors have outstanding balances from before your opening balance date, enter the individual unpaid invoices or bills. This creates open balances that collectively result in your Accounts Payable and Accounts Receivable opening balances. Before you create a new account on your QuickBooks Chart of Accounts, make sure you know what to enter for your opening balance.</p>
<ul>
<li>The initial opening balance sheet information is ideally the actual ending balance sheet for the reporting period immediately preceding the start of the budget period.</li>
<li>Therefore, when dealing with another current liability account, such as any loan, a credit entry to the account will decrease its balance.</li>
<li>Using accounting software can help you figure out what is missing, or you can fill out an accounting template and see the numbers in front of you.</li>
<li>The account causes some confusion as many people don’t know why it’s there and wonder if it has any use.</li>
<li>If you don&#8217;t see an opening balance, write down the date and amount of the oldest transaction in the account.</li>
<li>Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping.</li>
<li>In QBO I have a feed on both of them, however after categorizing the expense, I unmatch it, switch it to the primary account and save.</li>
</ul>
<p>They&#8217;d love to get you back on the right track so <a href="https://www.linkedin.com/posts/bookstime_marketing-agencies-thrive-on-creativity-activity-7307750938289598465-E6T2/">Accounting for Marketing Agencies</a> that you can move forward with your bookkeeping tasks with ease. When starting fresh with QuickBooks in creating accounts, I suggest we&#8217;ll have to reconcile the transactions first to accurately manage your books. We&#8217;ll need your bank statement to make sure they match your bank and credit card statements. The&nbsp;Opening Balance Equity&nbsp;account should have a $0.00 balance. For the balance to be zero, ensure that everything has been put in place correctly. It seems that something was likely posted to it that shouldn&#8217;t have been, or there was a missed entry.</p>
<h2>What is Used to Create QuickBooks Opening Balance Equity?</h2>
<p>A specific example of an opening journal entry is that of a new business formed by a founder purchasing shares for cash. If the balance remains lingering in the opening balance equity account, then it should be ensured <a href="https://www.bookstime.com/articles/opening-balance-equity-what-is-it-and-how-to-fix-it">what is opening balance equity</a> that there are no mistakes while carrying it forward. – New data files addition to the record of  the business, also requires this account opening.</p>
<h2>Handling Owner&#8217;s Investments and Withdrawals</h2>
<p>The balance should be zero and your new QuickBooks company file is complete and accurate as of the start date. Leaving a balance in the OBE account can misrepresent your company’s equity position. For example, if the account has a $5,000 balance, your equity section will show incorrect figures, which could lead to issues during audits, tax filings, or financial analysis.</p>

		
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