QuickBooks File Set up
by Barbara
(PIckering, Ontario, Canada)
Is there a certain specific way to set up a company file in QuickBooks? I have heard from some business people that their QuickBooks company file was not accepted by their accountant because it was not set up correctly.
Hi Barbara,
Check out the forum post Opening Balance Entries. It discusses my preference for entering opening balances.
Chances are, if the accountant didn't like the setup, it would be because the opening balances did not match the prior year's closing balances and/or the account types were not setup correctly.
Try not to use the "opening balance" field that pops up when you create an account. It has certain limitations and cannot be adjusted in some instances once an amount is input.
If you want to help out your accountant at tax time, take the extra time to map the account to the appropriate tax line.
In the Opening Balance Entries, I state not to post amounts to the income statment accounts. However, sometimes I know I am going to want prior year comparative figures.
If that is the case, I will book another journal entry with all the income and expense account details offsetting it to Opening Balance Equity as well. In the old days, this journal entry would have been booked to the Income Summary account.
The net income that flows through to the balance sheet MUST equal the previous financial statements.
P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.
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