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 under Capital.
Retained Earnings: These are the accumulated profits that remain in the business after dividends have been distributed