Retained Earnings Account is missing

I received a call from a client.   She had just started a new job and the accountant had completed the tax return and asked her to make some year end journal entries.  One of the entries was for her to post to the Retained Earnings Account.  She called me because she could not find the Retained Earnings Account on her chart of accounts.

The first thing I told her to do was to click on the chart of accounts and show all accounts.  It was possible that the account may have been made inactive.

The second thing I did was ask her how many years they have been using QuickBooks.  Sometimes you do not see that account until you have completed the first year.  In the second year, the net profit or loss from the prior fiscal period will show in the newly generated Retained Earnings Account.  That is where Quickbooks puts it by default.  If you run a balance sheet report in the new (2nd) year, you will see Retained Earnings.

Since we ruled out the inactive account and since the business had been using QuickBooks for several years, my last thought was someone may have renamed the Retained Earnings account.  I asked her to edit all of the equity accounts.  

Below is a screen shot of the Owner's Equity Account, which was the renamed Retained Earnings account. As you can see below, because it is a QuickBooks default account, the account type is grayed out, meaning you cannot modify that account type.

Click photo to  enlarge

I told her to contact the accountant before she renamed the account to Retained Earnings.  If the accountant wants her to rename the account, that is easily done by editing your account.


Lynda

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