How do adjusting entries from Reconciliation affect accounts?

When you reconcile an account in QuickBooks Online, the ending balance must match your bank statement. If there is a small difference and you cannot locate the discrepancy, you can create an adjusting entry to force the balance to zero.

We recommend using adjusting entries only as a last resort for minor amounts (such as a few pennies). Creating adjustments for significant differences can mask underlying data errors and cause issues with future reconciliations.

Here is how an adjusting entry affects your accounts:

• If the difference is negative: QuickBooks creates a check transaction (without a check number) that reduces your bank account balance. This also decreases your Opening Balance Equity account.
• If the difference is positive: QuickBooks creates a deposit transaction that increases your bank account balance. This also increases your Opening Balance Equity account.

In both scenarios, the adjustment impacts your Balance Sheet but does not affect your Profit and Loss report.