 QuickBooks Online 2022 Bank Reconciliation Opening Balance Problem. Get ready because it's go time with QuickBooks Online 2022. Here we are in our get great guitars practice file. We set up with a 30 day free trial holding control down. Scroll it up a bit to get to that one to 5% currently in the home page. Otherwise known as the get things done page. Something you can do by going to the cog up top and then the switch to the accounting view down below. We will be toggling back and forth between the two views either here or by jumping over to the sample company file currently in the accounting view. Back on over we're going to open a few tabs to put reports in. Tab up top right clicking on it duplicating that tab. Back to the tab to the right right clicking on it duplicating it again. As that is thinking let's jump on over to the sample company file to see where the reports are located in the accounting view right on the left hand side where it says reports. There they are that's where they'll be located. That's where their house is going back on over second tab and the business view reports located in the business overview and then the reports and then we're going to close up the hamburger. Sheet the big balance sheet and we don't need to do a range change or I do I do need to do a range change. The date is now February here so 010122 to 013122 the first month of our practice problem. Run that report tab into the right and then we're going to go back down to the business overview once again close up the hamburger and then we will open up the profit and loss the P and L the income statement change that range change that range from 010122 to 013122 0131 first month run in it. Okay back to the balance sheet that's where our focus is I'm going to focus down even further on the balance sheet to that cash account because we're reconciling the cash account reconciling our balance as of the point in time being January 31st 2022 to what is on the bank statement and the outstanding items the outstanding checks and deposits typically being the reconciling items to do that we've been entering data on the left hand side here finding that reconciliation process it's in the bookkeeping area if you were in the accounting view by the way it would be in the accounting area and then we're going into the reconcile at the bottom and we've been doing the reconciliation so we're going to resume resume the reconciliation process closing to get this thing out of here don't show me this again don't do it again if I'm going to hit the carrot drop down so you'll recall that this number was the statement balance that is on our statement ending balance as of January 31st 61 to 41 and then we have the activity that we put into place which is the cleared items the beginning balance this is where our problem is the 25,000 notice that that doesn't tie out to my beginning balance here how can I reconcile if my beginning balance doesn't tie out that's the that's the thing and then I've got 106 829 on the payments which is not the same as the items here because I couldn't find these two I couldn't find these two on on my books and then this one the 143 70 85 is what we have here so we've got that problem but is it really a problem because like I said we've got everything checked off here like this is this was an issue but and I couldn't find these two but I found everything else and I made them all yellow ties them I ticked them all off they're all ticked off now but I don't care if they're ticked off and then we're going to close up the the triangle but now it says I'm in balance it says I'm in balance so I could kind of stop there and go forward and that would be that would be kind of fine because then everything will roll forward from that point in time but it would be nice within the accounting system if you kind of reconciled or saw what that difference is so that we could basically see it so I would like to be able to actually check these two items off in the current books as having been reconciled in the month of January and I would like to have the proper beginning balance or at least to replicate in essence what the beginning balance will be was something I can check off over over here on the bank reconciliation so what happened then what happened is that this beginning balance was from the prior accounting system where we had a difference between the bank balance and the book balance as of that point in time we had to put it into our system based on what was in what was on the books because we had to be in balance and there was 25,000 in our system that we needed to put the beginning balance into our system at 25,000 so that we were in balance but that 25,000 we put in place was correct for our bookkeeping balance but not correct with regards to the bank balance because there were outstanding checks at the point in time of the end of December or the beginning of January and obviously those outstanding checks are these two items so these two items represent the outstanding checks so those two problems reconcile them out if all those outstanding items happen to clear in the following month which is quite likely and that's why it nets out to zero but what I'd like to do is put these two into the system so I can show them as having been something that cleared in the current timeframe even though they were entered into the system in the prior period to do that I'm going to look in I would have to look into my prior bookkeeping actually look these checks up as to when we wrote the checks and it would be sometime before the cutoff date in our case January 1st of 2022 it'd be most likely sometime in December so I'm going to go and I'm going to put those in those two checks in as of the date they were written not the date they were cleared and then clear them as of this point in time then I can also change my beginning balance in other words I can change my beginning balance to represent the 25,000 cleared balance and then I can put these two checks on the books which will decrease in essence that balance back down to the 25,000 but be able to check these two off in the current timeframe allowing me to see the activity of these two items actually clearing in the current period and being able to see that current balance at the proper cleared balance of the 30,000 okay so let's see how that would work let's go back on over and say okay well how in the world are you going to do that well let's let's leave here for now let's say let's say I'm going to leave leave this save for later save it for later and then I'm going to hold up I'm going to open up the handbook and then we're going to be in the bookkeeping area again let's go into the register the chart of accounts and then the register closing out the hamburger and then I'm just going to go into the cash register I don't want the bookkeeping help here we're going to close that and we're going to go into the view the register view the register so there we have it and now I'm going to imagine I'm looking up these these two checks and I'm going to put them in our system as of the point in time that we actually wrote the checks and then I'm going to go down to the beginning balance we put in place which is all the way down here at the 25,000 and I can actually adjust that 25,000 to 30,000 so once again this is going to go up you could you could change this to 30,000 and then record the other 25,000 as the two checks which will take it in essence back down to a net balance of the proper 25,000 but broken out into the three items so let's see what that will look like let's go up top and say okay I'm a little worried I'm a little scared it'll be okay we can do this I'm going to hit the drop-down and we're going to say this is going to be a check do I want it to be a check is it a check over here it's it has no check number let's just make an expense form let's make it an expense form is that what I have here I want to make it an expense form and then this is going to happen let's say as of the prior period so let's let's say it was on 1225 to one prior year not when it cleared that's important we're not putting it on when it cleared in January but when we wrote the check or process the transaction which would most likely be a check if it took that long to clear but in any case we're going to say then the payee I'm going to say is epiphone epiphone and this is going to for prior period check I'm going to just put that in there and the payment is going to be for four thousand and the other account now epiphone is who we buy our inventory from so it's most likely that the other actually went to inventory but I don't want to post anything to inventory because when we set up our beginning balances the beginning balances were correct so in essence I just want a clearing account for this these transactions to wash out because once I enter the three transactions they could they should basically wash each other out so that the other account we go to will be zero we could go we're going to take it therefore to some equity account and we could put it just into the owner's equity but possibly that opening balance equity is a perfect clearing account for us to use because we are in essence doing the beginning balance here adjustments for these open items for the cleared items so let's put it into opening balance equity opening balance opening balance equity cannot am I does now what they call it here or beginning balance beginning balance we'll call it beginning balance beginning balance so that's the one we're going to put it in here that's a clearing account after we do these three transactions that should go back down to zero so let's go ahead and save it and that I'll do the same thing for the one I'm going to hit another expense account this one I'm going to say happen let's just say on the 26th of the prior period so now I'm looking at this check here the second check going to put that in place and this one let's say it was for Gibson USA just for example purposes prior period check we're going to say and this one was for 1000 and it's going to go also into the beginning balance account so those two go into the beginning balance account now we're going to adjust the beginning balance that went into cash if I go down below that's this 25,000 to 30,000 which will be the other side which also went into beginning balance if you're not comfortable doing this you could add another transaction which would simply then record record the the 5000 to beginning balance so you can see it in two accounts and then you just have to check off two accounts as you start off but I'm going to go ahead and change this I'm going to say let's try to make this 30,000 and then I will save that so we'll save it the transactions you are editing has been reconciled it hasn't yet been reconciled because we haven't finished it so I'm going to say yes and so there we have it so now we've got that 30,000 here instead of 25,000 the 1000 and the epiphone I put on for 40,000 which is wrong let me change that I know you've probably been telling me you're trying to tell me you added another zero you added too many zeros okay I fixed it I fixed it now 30,000 for 5,000 difference and here's the 5,000 down here so that should basically wash out if I go to my balance sheet and I refresh this I'm just going to run it back and run it back hold down control scroll up a bit go on down go on down to the beginning balance area and then here's the stuff that happened in the beginning balances let's then go on back to the prior period let's say let's say let's do this 0101 212 this is before we actually started our current information this is when we entered the beginning balances so now we've got that 30,000 that is here instead of the 25 that's washing out against these two expenses that brings it in essence back down to 25 and so the total is back down to zero okay so going back up so now now then we can go back to the reconciliation so I'm going to go back to the first half open up the hamburger and I'm going to go down to the bookkeeping area again and this time go to the reconcile going to reconcile things you got to reconcile so we're going to go into there and then close the hamburger, resume the reconciliation process the process may now resume the process may now resume so now we're off by 5,000 because that beginning balance let's open up the carrot right here beginning balance is now correct so now if I was to check all this stuff off we got the beginning balance we got the same starting point I can kind of check that off and say yeah that checks off and then we've got all of the 143 70, 85 that's the increases that checks off that checks off and then we got the 111 829 we don't have that because we got to check off those last two which are right here now they're in the prior period that's the issue check in those two off check, check, check, double check and now we're at the 11829 so the 11829 there it is so that means that the ending balance that we have to has to work, it has to reconcile so we're at the cleared balance now of the 61, 241, 85 the cleared balance represents the ending balance on the bank statement so you can think about that as in essence the bank statement balance in our books it's the cleared balance because it's the one that we checked everything off onto clear what we're looking for now are the unclear items because the unclear items are the items that are going to be the reconciling items taking us from the cleared balance or bank balance and tying us to, reconciling us to the bank balance which is what is now represented on our books here in the good old cash account the 88 645, 25 so that's where we stand now now next time I'm going to actually we want to look at the reports I'm actually not going to finish it I'm not going to finish it quite yet I'm going to finalize it next time because I want to look and review the reports next time it's like you're really dragging this out I know but I want to look at the reports next time and sometimes they kind of adjust the new track of those because you might want to print those out so you have a static copy of them in essence because they're a little bit different than other reports and we'll talk more about that next time so I'm not going to finish it yet man really not yet next time we're going to save it for later next time we're going to be back here so make sure to do that because next time we're going to hit that green button so you won't want to miss it