Quicken & Other Budget/Accounting Software/Opening Balance
The financial year for our company is from Jan-Dec, but i started doing the acccounts from March14 only as this is a new company i work with, and feb14 accounts has been closed.
When i started doing the accounts from March14, i use a fresh new software and entered the opening balance accordingly to the chart of accounts, as at end of Feb14.
I have problem doing the Mar14 bank recon as some of the cheques was from Feb14 and been captured in the opening balance only. For example as below:
March14 bank recon currently unbalance of $500 due to one cheque issued in February (previously unpresented in Feb14) under PR Specialist expenses. This $500 has been entered in the opening balance for PR Specialist expenses.
How do i make the recon balance?
Do i need to enter a journal? if yes, what is the transaction?
First you will want to adjust the Opening balance as of 2/28 as follows:
Debit the bank account for the grand total of outstanding checks
Credit an equity account called Open Balance Equity
Then create one check for each outstanding check on the 2/28 bank rec
use the correct date and payee, but post to open Balance Equity
When you do your March Bank rec, clear
1. The open balance per bank
2. Your Journal entry that totaled outstanding checks
3. Any of the checks that did clear that were dated before 3/1
4. All other amounts that cleared.
Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
We sell and support QuickBooks Enterprise