QuickBooks Desktop software is one top-rated software in the U.S.A., U.K and Canada. The software has always been widely regarded by all the categories of bookkeepers and accountants. The software is full of different features and functions and has been updated regularly to keep the software relevant with the changing federal rules and guidelines. QuickBooks is very easy to use and integrates with multiple other software, making working very easy on this software. If you spend some time with the software, you don’t need a dedicated bookkeeper or accountant.
The software is developed and distributed by Intuit, a $6.7 billion company working in the market, nearly completing four decades. The software is very reliable, and it can be used at any place, anytime, without any issues. The software has a few different versions, which are as follows:
- QuickBooks Desktop.
- QuickBooks Pro.
- QuickBooks Premier.
- QuickBooks Enterprise.
- QuickBooks Online.
- QuickBooks For Mac.
These are the different versions of the software out there for you to purchase according to your company’s requirements and size. In this blog, you will learn more about the Retained Earnings and some important aspects, so please read the blog very carefully.
In QuickBooks, what are Retained Earnings?
Depending on the financial year closing date you specify, QuickBooks also transfers the excess amount from your other business accounts to Retained Earnings on the same day. QuickBooks automatically creates a “Retained Earnings” equity account when you start a new company using QuickBooks Desktop software.
How to View Retained Earnings Account in QuickBooks
Viewing the account is one thing that will help you to understand the Retained Earnings a little better, and to do that, you need to follow the steps that are given below:
- You need to Select “Company & Financial” from the menu to view your Received earnings account from Reports easily.
- Under the equities section of the balance sheet, the standard of the balance is also shown.
- The balance sheet standard is then selected.
- To view the account’s transactions, go to the Company menu and then to the Accounts Chart.
- Click the “QuickZoom” button at the bottom of the chart for a complete list of transactions.
How to Adjust Retained Earnings Account
A total sum may be provided whenever a new transaction is recorded in the balance sheet, and the account drop-down list can choose Retained Earnings from equities. The Retained Earnings Account in QuickBooks may create balance sheets, log entries, or checks. When adding new data to alter the amount of your Retained income, be sure to preserve or save the information. You may also specify the Retained Earnings account when you make an entry in your General Journal or when you enter check information after writing a check from the Retained Earnings money.
How to Find Retained Earnings In the Account
Although Retained Earnings are generated automatically, you might have accidentally removed or deactivated them if you can’t locate them. To find the account, you need to follow the steps that are as follows:
- To check inactive accounts, first, tap on the “Lists” tab, and then you need to choose “Account Charts”
- To reactivate the account, you need to tap on the “Show Inactive Accounts” option, then tap on the “X” button.
- The “Reports” menu may be used to create a new Retained Earnings Account by choosing “Company & Financial” and tapping on the “Company & Financial” option.
- QuickBooks will prompt you to establish a new retained profits account if the Report has been erased or destroyed.
These steps will help you find the account, and you just need to apply every step very carefully. The following section will help you understand the Retained Earnings and formula’s, so please read it very carefully.
What is Retained Earnings and How Do You Calculate Them?
The remainder is paid at the end of each financial year. The transfer resets your company’s balance to zero for the next financial year, allowing you to monitor the growth or fall in your company’s capital. These accumulated balance sheets of your small business at the end of the year are known as Retained Earnings. After all of the invoices and payments have been paid, your company’s positive or negative balance is transferred to a new account called Retained Earnings in QuickBooks Desktop software. Now that you know precisely the meaning of Retained Earnings, the formula will help you understand it a little better, so do check the next segment and help yourself understand Retained Earnings.
A formula gives you an idea of how you form certain things, and in this section, you will learn about the Retained Earnings. The formula of Retained earning is as follows:
RE = Beginning Period RE + Net Income/Loss – Cash Dividends – Stock Dividends
Where RE = Retained Earnings
This is the formula of Retained Earnings that will help you understand the Retained Earnings better. Now that you know the formula of Retained Earnings, you must move on to the next segment, which will help you understand how you can view the Retained Earnings account detail, so do give it a good read.
How do I see the information of my Retained Earnings account?
As previously stated, Retained Earnings are profits earned by a business that has been re-invested within. Only after the retained earning account is updated can the transaction be registered. Only by recording your net income and analyzing the amount of that specific transaction can you determine your Profit and Loss. Now that you know this, you must read that how can you view the details of the Retained Earnings account, which has been stated in the next segment, so do give that a good read.
How to view details of the Retained Earnings account
As discussed in the last section, the Retained Earnings account primarily displays the expenditures and revenue you earned the previous year. When you start a new financial year, QuickBooks Desktop software will always include the net income from the prior year’s financial year in the Retained Earnings section of the balance sheet.
The Profit and Loss Detail report can be viewed here
You won’t notice any transactions on your account since QuickBooks online automatically swaps money from the previous year’s revenue; as a result, you won’t see any transactions on your statement. Run your prior year’s Profit and Loss statement to view the Retained Earnings. To see the Profit and Loss Detailed Report, you must first complete the following steps:
- Open the Reports menu, then search for and choose the “Profit and Loss Report” option.
- You must now choose a “reporting period” from the “drop-down menu”. You must select all of the “Dates options”.
- You must now access the “Profit and Loss” Detail for All Dates by tapping on the “Run Report”, then the “Net Income”, and finally the Profit and Loss Detail for All Dates.
The Profit and Loss Detail Report may be seen by following all of the steps listed above. Now that you know how to see a comprehensive Profit and Loss Report, you should also know how to view a Profit and Loss Report by year, which you can accomplish by following the steps below:
- To access the “Profit and Loss Report”, go to the Reports “menu” and choose “Profit and Loss Report”.
- You will now see the “Customize option”. You must tap on it and then tap on the Rows/Columns to access that area when entering the “Customize Report window”. Now you must choose the Years option from the “drop-down list”.
- Finally, you must choose the option to “Run Report”.
These are the options that will help you view the Retained Earnings account in both View the Profit and Loss Detail Report and View the Profit and Loss Report by year. Now that you know, you must know how to review the Retained Earnings account Quick Report, which we will cover in our next segment. Please read it carefully because it will assist you in determining whether there is a difference between the current Retained Earnings amount report and the amount on the Profit and Loss Report, which you can always verify by viewing the account Quick Report.
How to Read the Quick Report on Retained Earnings
As previously said, if there is no change between the Profit and Loss detail report and the annual report, you should review this report, which will assist you to comprehend your Retained Earnings. You must follow the steps given below to see the Retained Earnings account Quick Report:
- You must first enter the settings “menu”, then choose the “Chart of Accounts option”.
- Now you must locate the “Retained Earning account” and choose the “Run Report” option from the “drop-down” menu and the all dates option from the “Report period drop-down list”.
- Finally, you must choose the option to “Run Report”.
These are the steps that will help you find the Quick Report of the Retained Earning account. You can go through this whole blog and help yourself understand the different aspects of Retained Earnings. Still, suppose you cannot perform any step or have any other query related to QuickBooks Desktop software. In that case, you must talk to one of our available technicians at QuickBooks Desktop Error Support.
All of these QuickBooks Technicians are highly trained and resolve almost every error related to QuickBooks Desktop software. So if you are facing any issue related to the QuickBooks Desktop software, you only need to tap on the QuickBooks Desktop Error Support. We will call you back and fix whatever issue is related to QuickBooks Desktop software.
To summarise, QuickBooks Desktop software is accounting software that has made managing the books and accounts very easy for a particular organization. The software comes from the house of Intuit. Intuit has been in the business for quite some time, and they have built trust amongst their clients over the years. The whole idea of this blog is to help you understand the Retained Earnings and some very important aspects, so please read the entire blog very carefully. I hope that this blog proves to be helpful and was worth your time.