Entering initial balances is essential when transitioning to a new accounting system or starting from scratch. The opening balance document allows you to record the starting balances for assets, liabilities, and capital accounts, based on the year-end date or the end of the previous period. This guide will focus on one specific account in the opening balance: the Retained Earnings account.
Retained Earnings: These are the accumulated profits that remain in the business after dividends have been distributed.
To record, do the below steps-
- Go to Accounting > see also > Opening balance entering
The Other Sections tab becomes accessible after you choose the Other Sections option from the Main tab.
This tab allows you to input the balances for General Ledger accounts where you cannot set the beginning balances through other available methods.
Opening Balances Entering Document: Other Sections Tab
In the Dr / Cr column, indicate whether you're entering a Debit or Credit, depending on whether the account is an Asset or Liability/Capital.
In the Account column, select the account (from the chart of accounts) for which you want to input the beginning balance. For this example, choose Retained earning GL.
In the Account's Analytics column, provide any additional dimension information required for the chosen account by clicking the <><> link. This will open the Dimensions: Based on the transaction, select the dimension.
Dimensions Dialog Box for the Selected Account
In the Amount (Cur.) column, input the opening balance in the account's currency.
In the Currency column, choose the currency of the balance being entered.
The Amount column will automatically populate with the amount in the accounting currency, based on the exchange rates as of the document date.
In the Transaction Content column, you can add a description for the posting if necessary.
Post the document, the below entry will be created
Dr Service
Cr Retained Earnings
You can view the impact of a transaction in the Trial Balance under the Turnovers section. Depending on the nature of the transaction, this entry will be reflected in the Equity section.
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