How do you obtain opening capital when given the monthly transactions for a business
Answers
INITIAL CAPITAL
If you are just starting your business, you may need to record a special accounting transaction for your initial capital. To do so, you should use "New Accounting Transaction".
Example:
You are starting your company and investing $10,000.
Make sure you have your company bank account recorded in OneUp. You can view the list of your banks in the menu "Accounting"
Next, Open the action, "New Accounting Transaction".
Record the transaction as:
DEBIT: Bank Account 10,000
CREDIT: "Paid in Capital" 10,000
OPENING AND CLOSING BALANCE
Create an accounting transaction in Accounting - Chart of Accounts - green button - Accounting Transactions, set your opening balance date and name the transaction, so, you can identify it later.
Register all of your debit and credit amounts for your asset and liability accounts and also post the profit or loss into the corresponding account from your chart of accounts.
Example:
Balances from your former accounting application:
Bank 1000 in your favor = debit balance
Accounts Receivables 500 in your favor = debit balance
Other Assets 500 in your favor = debit balance
Inventory 1000 in your favor = debit balance
TOTAL ASSETS 3000
Accounts Payables 200 your debt = credit balance
Other Liabilities 100 your debit = credit balance
Loans 200 your debt = credit balance
Capital 1000 your debt = credit balance
Profit 1500 in your favor = credit balance
(loss would be a debit balance)
TOTAL LIABILITIES 3000
You would then set up an accounting transaction like:
Tip:
If you need to create an opening balance as of 01/01, but want to set up balance sheet as well as P&L, it might be best to create this accounting transaction for all balances as of 12/31 (previous year) and then use the year end closing, that will allow you to start with opening balances into the new year.
You would then just set up ALL balances from your balance sheet as well as your Profit and Loss Statement. From the nature of accounting, the transaction would be balanced and the year end closing would post your profit and loss into retained earnings for the new year.
You would need to set up your accounting transaction:
All debit balances from your balance sheet = debit entries in the transaction
All credit balances from your balance sheet = credit entries in the transaction
All debit balances from your P&L = debit entries in the transaction
All credit balances from your P&L = credit entries in the transacton
BALANCE SHEET
Bank 1000 in your favor = debit balance
Inventory 500 in your favor = debit balance
TOTAL ASSETS 1500
Accounts Payables 100 your debt = credit balance
Capital 1000 your debt = credit balance
Profit 400 not used in the transaction
TOTAL LIABILITIES 1500
PROFIT AND LOSS STATEMENT
Sales 1000 income = credit balance
Cost of Goods Sold 400 cost = debit balance
Utilities 200 cost = debit balance
Profit 400
Closing Balance 31/12/XXXX would look like:
After registration of your closing balance from the previous year, you need to run a year end closing to start with the open balance into your new year.
In the example above, you would close 2015 and start 2016 with the opening balances in your balance sheet as of 01/01/2016.
The year end closing can be run through:
Accounting - green button - Accounting Transactions - green button - Year Close Fiscal Year.