Understanding Retained Earnings in QuickBooks

Have you pulled your Balance Sheet and you are wondering where the “Retained Earnings” amount is coming from?

Let’s talk a little about what you’re seeing on your reports… 😊

Learn where retained earnings come from and why they are on the balance sheet.

➡️ Making reports Side by Side

Go up to Window
“Tile Vertically”/ “Tile Horizontally”


Cash Basis – At the moment you spend money it’s an expense, and at the moment you get paid from customers it’s Income.

Accrual Basis – At the moment you bill customers it’s Income, and at the moment you get the bill, it’s expense.


➡️ Profit & Loss
Has your Income, Expenses, Net Income.


➡️ Balance Sheet
Has your Assets, Liabilities, Equity.


➡️ Opening Balance
The account QuickBooks creates – a generalized account.


➡️ Retained Earnings
Profit you’ve made in the previous years.


➡️ Net Income
Current Year Profit

Timestamps:

0:00 - Intro
0:21 - Checking reports side by side
1:05 - Cash vs accrual basis
1:30 - Proft & Loss
1:41 - Balance Sheet
2:27 - Equity
3:06 - What is opening balance?
3:44 - Retained Earnings
4:27 - Net Income
5:01 - Negative in equity explained
5:50 - Why is retained earnings negative?
6:24 - Double-entry accounting
7:06 - Final Thoughts

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I’d love to connect with you 👇

#CandusKampfer

[charity]

Thank you so much!!! I have been searching for this answer and nothing gave me the answer I was looking for! You explained and showed it so well!

[elijahmackey]

The best explanation of Retained earnings and Balance sheet I have seen. Thank you.

[My.BusinessCoach]

I love all of your videos and especially the classical way of expressing difficult things in super easy way. I would like to inform you that you are my favourite channel on Quickbooks and I have great love and respect for you. May you live long. Love you.

[MJCPeters]

I totally had this wrong in my head. Now I get it, Thanks!

[GIpinay]

I wish I found you when I started the course, it's really a big help, Candus. You're also fun to

[michellehoranentrywayreale]

You have a wonderful way of explaining all of this :) Thanks!!

[ingrid]

But where sum on opening balance equity comes from? I didn’t understand a little bit

[iossorio]

Hi, very nice explanation and videos overall, if I buy one of your other courses, does the access to see these videos continue? meaning, does it expires?

[shahidshahul]

Hi,
Kindly explain how can we create 'Reserves and surplus' charts of account in Quick Book.
Also in which group we create the same.

Thank you

[edwinaragon]

Hello, I dont know if you made a video on this yet, but I just started my business, and on my 3rd year, and I have yet to take a wage for myself. I have no employee's and I'm a sole proprietorship. How would I take a wage and classify this in quickbooks as equity, and at the end of the year, how would I zero this out, if necessary

[warrenguardiario]

Hi Candice like to know if you have an idea regarding what my concern.. What exactly happened was our list of customer exceeded to its limit of 14000list so we created a new company and create a enter all of those transaction basing on the previous company file that i have. In my previous file i got 25k retained earnings thats for accrual base report and got 65k on my accrual base. What exactly happened i reentered those entry to my new file as general journal entry when i check the balance sheet report... The 25k accrual base i was able to get it correctly but i noticed on my cash basis its higher than the original amount of what i expected to my old file... My question is im i doing it correctly if yes why my retained earning for cash base is not right. I did make some review about it even the journal entry i was able to make sure i entered it correctly based on my previous file information.. Other follow up question should i recorded it those entry as how it was created before rather than having a journal entry for those if i need to get the cash base correct. Please need your expertise

[jaycee]

Hello there. So I started working with a new client and when analyzing the financial statements from previous yrs I noticed that Retained Earnings have a balance of 0 every year; it's like QB has not been doing the transfer as you explained. Can you please help?

[erosbackup]

I closed the books and then the owners personal expense is in the bal sheet and it's huge. I thought it would go away, like empty out. What am I doing wrong?

[FireLiteCreations]

Hi Candus, how come your retained earnings in 2018 Balance Sheet does not match any numbers from the 2017 Profit & Loss? Where should it come from?

[theresapage]

Hi Candus, would it be possible to ask you a question in quickbooks privately

[iamintractable]

I guess I dont see how 2120.44 on left is reflected on right when retained earnings shows 4443.14. What I needed to see was what numbers flowed into the new year.

[battlemaniac]

i am an accounting student. can anyone please explain to me how do we calculate retained ernings after trial balance?
i have learned only double entry, ledgers, trial balance.
i am now learning statement of profit and loss, statement of financial position.

[edlynagamata]

I cannot find retained earnings on my clients bookkeeping account.

[kaveetagurav]

how to add opening and closing inventory value only

[allanmbelenga]

I like the explanation but had hard time seeing what's on the video