Responses IPBC webinar: Opening Balances & Adjusting Entries Q&A Part 1 Oct 3 2012

Q: Doesn't QuickBooks do an auto closing for year end?
A: Yes, it does, and what we're doing with this method of entering transactions is tricking it to give us what we need to show comparatives without having to use a calculator to calculate the changes for each account over the year.

Q:Rented by the hour? What kind of bar is this?
A:What's being rented is the room upstairs... to the waitress. and now the bar owner is divorced... go figure..the story continues tomorrow and no one is sure how it ends.  Yes, I'm sure Fred's wife had similar concerns to yours.

Q: There is no AP if the cheque was issued..
A: That's right. Once the cheque was written in the prior books, the payable would have been reduced to nil, so it wasn't necessary to enter a Bill - that's why we're deleting it.

Q:Please show the Journal report so we can see the order you made your entries in.
A:In QuickBooks, that really isn't necessary.  You can make the entries in any order you want to and if necessary, delete them and re-enter them with the right numbers if the software won't let you edit the Open Bal Equity entry.

Q:Can you make your columns wider so we can see...
A: In QB v 2013, the ability to adjust column widths is currently restricted in some screens, so you'll have to extend the form instead.

Q: Is the Opening Balances Equity account being used like a cash clearing account?
A: Yes, that's exactly it. Instead of entering a Journal entry with the trial balance, we're using the OBE account as a clearing. That's what makes it possible to enter individual entries in the account registers and eventually to balance or adjust the trial balance to agree to the ending balances in the old books.  That's because life isn't perfect, and the old books won't be finished until some time after you start the new books.  You know, it's those receipts they forgot to give you, and that invoice they forgot to tell you they hand wrote and never posted...

Q: Will QuickBooks let you 'disconnect' the sub-ledgers from the General Ledger to enter the outstanding items in teh sub-ledgers as of the date that we are taking over the file?
A: Yes the Chart of Accounts is a list.  All lists except for Vendor List are eligible to be five levels deep in hierarchical mode.  You can re-organize the sub-accounts any way you want and then either merge them, or put them together in a different way at any time. As for Customers, sometimes a deposit can block the ability to move a Job to become a Customer, or to sub-Job something, but if you were to delete that payment / deposit and re-enter it after you moved around what you wanted moved, that would also be possible.

Q: Sorry, I missed the first few minutes, how do we get this file later? Can we get this presentation later so we can slow it down and soak all this in?
A: Yes, you can purchase the presentation (IPBC members visit www.ipbc.ca and log in as members to access the Partner Page for 50% discount)  Non members will find the webinar in my shopping cart.

Q: So you are doing this purely for the purpose of having comparatives for the reports in the prior years.
A: Yes, if you're doing a corporation, it's necessary to do comparatives on S100 and S125 on the T2 Corporate return.  This is a great way to ensure you've got the right numbers, and if you use QuickBooks, you can export directly to Profile T2 so all this is automated.  OF course you have to enter the GIFI codes into the Account setup and that's easy, just edit each account and set up the GIFI codes.

Q: This is a smart idea. I always wondered how to get comparatives when I set up a new data file. Thanks!
A: You're welcome.

Q: You are using QB 2013, when is that going to be available?
A: Today, if you go to www.quickbooks.ca

Q: Will these data files be available with previous versions?
A: No, you can't work backwards to open newer versions of data files in older versions of the software.  Be brave, install the latest version and play with it before you move your files over.

Q: You can't edit tax adjustments - Oh, you found a way!
A: Yes, you can, you can edit tax adjustments, you can edit financial statement adjustments too. Just pick a different day, and make the entries on that day. You'll have to watch the video again to see what I mean.

Q: Why is the bill entered at all?
A: You would enter a Bill to set up a Vendor unpaid bill because that's how you enter opening AP balances. If you enter your payables by Vendor, then, when they are paid after the conversion date, you can clear your payables by Vendor by Item.  And you can keep your Vendor accounts reconciled. If for example, you have a Vendor with a number of unpaid amounts, you could enter each Bill, coding each to Open Bal Equity (and you could set up a sub-equity account to handle just payable or just receivables, or just inventory if it's a lot of transactions so you're sure you balance) That way, you will have a great way to reconcile your ongoing AP balances and to ensure that your ending outstanding amounts in the old set of books equals what your new books have as the starting figures (on a per Bill basis, not just a lump sum that may or may not include the same Bills as the old books did)

See you all tomorrow for more on how to make adjusting entries, and how to adjust your opening entries.

Make sure you download the sample data files (Save them first before opening, as they are backup *.QBB files that must be restored with QB 2013).

Download and install QB 2013 before you attempt to restore..