QB Issue Resolution:
I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)
[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing – you record value you take from the business here
>> Equity Investment – record value you put into the business here
End of the year you do journal entries, for each partner
debit investment, credit equity for the total in investment
debit equity, credit drawing for the total in drawing
then one more journal entry
debit retained earnings for the full amount
credit partner 1 equity for his portion
credit partner 2 equity for his portion
etc etc
Resolution for Issue 'I have a question regarding owners draw and retained earnings. We are a partnership with 3 partners. Our managing partner is the only partner with equity in the firm at this time. I was brought on mid-way through 2015 so this is my first year end to close out. First question is regarding the draw accounts. These accounts have never been closed out at the end of the year. So they just have a running negative total from the firms inception. What is the proper process in QB to close out these accounts at the end of the year? Being that we are setup as a partnership what should I be doing with retained earnings at the end of the year? I do see that QB has automatically made our journal entry of net income into retained earnings. Should retained earnings then be distributed to the partner equity accounts? Any help is appreciated.' available: Yes (Solved).
Source: Intuit Community forum.
I have a question regarding owners draw and retained earnings. We are a partnership with 3 partners. Our managing partner is the only partner with equity in the firm at this time. I was brought on mid-way through 2015 so this is my first year end to close out. First question is regarding the draw accounts. These accounts have never been closed out at the end of the year. So they just have a running negative total from the firms inception. What is the proper process in QB to close out these accounts at the end of the year? Being that we are setup as a partnership what should I be doing with retained earnings at the end of the year? I do see that QB has automatically made our journal entry of net income into retained earnings. Should retained earnings then be distributed to the partner equity accounts? Any help is appreciated.: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.
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Error Recovery for proper process in QB to close accounts at the end of the year [Canada]
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