Читать книгу QuickBooks 2022 All-in-One For Dummies - Nelson Stephen L., Stephen L. Nelson - Страница 80

The sort of accounting taught at local community colleges makes just the sort of closing entry shown in Journal Entry 19, but you don’t need or even want to make such a closing entry within QuickBooks.

The closing entry shown in Journal Entry 19 gets made in a manual system so that the revenue and expense accounts can be reset to zero. By comparison, QuickBooks, relying on the power of the computer, doesn’t need to have these accounts reset to zero to calculate the revenue and expense for the new accounting period correctly. QuickBooks, as you discover throughout this book, can calculate revenue or sales for any period and for any interval of time, using its report generation tool to summarize the revenue and expenses that occur within a particular time interval.

This seemingly missed step doesn’t cause any idiosyncratic behavior on the part of QuickBooks. QuickBooks lumps the revenue and expenses from all the previous years into a retained earnings amount reported on the balance sheet. Net income for the current year is also reported in the equity portion of the balance sheet. In addition, if you have a corporation, QuickBooks typically includes a dividends paid account in the equity portion of the balance sheet. I’m getting ahead of myself, however.

The main thing that I want you to know is that this seemingly critical textbook journal entry for closing out revenue and expense accounts isn’t made within QuickBooks. This is okay, because QuickBooks doesn’t need to make the traditional closing entry.

You may want to ask your accountant about this entry. Typically, however, any dividends paid by a corporation are zeroed out or combined with retained earnings at the end of the year. If you want to combine dividends paid for the current year with accumulative retained earnings, you do this with a journal entry. The journal entry credits the dividends paid account and debits retained earnings for the amount of dividends paid for the year. I hesitate to encourage you to make this journal entry willy-nilly, however. I think it’s okay to skip making the entry. And before you make it, consult your tax adviser.