Ireland Opening Balances

Joined
Aug 28, 2016
Messages
2
Reaction score
0
Country
Ireland
Hello,

I am just finding my feet with book keeping, and wanted to know how I can handle opening Cash Balances, when commencing a set of accounts.

For the sake of balancing the trial balance, I noted the opening balances for the "Cash" and "Savings" accounts with a corresponding opening entry in the "Revenue" account. However I am not sure if this is correct, as that revenue was not earned in that month.

I understanding that there is a process for closing accounts to "Owners Capital" account, however this is really for personal finances, and I need to start the accounts at some point, without the ability to have the opening balances fully balanced prior to starting.

Any information that you may have is greatly appreciated.

Many Thanks

Arthur
 

DTA93433

VIP Member
Joined
Jun 14, 2016
Messages
113
Reaction score
10
Country
United States
Your cumulative Cash balances should be segregated between what (if any) was originally contributed to the business as capital (owner's equity) vs. what was collected due to sales. This would make up your credit side of your opening balance entry. If none of the cash was earned to due revenue (sales), than the offsetting credit would be to owner's equity.
 
Joined
Aug 28, 2016
Messages
2
Reaction score
0
Country
Ireland
Many Thanks Stephen. That makes sense. As the very first entry in this set of accounts, I will post the CR opening balance to Owners Capital, and segregate going forward. Thanks again!
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Members online

No members online now.

Forum statistics

Threads
11,742
Messages
27,787
Members
21,737
Latest member
DevinCiz

Latest Threads

Top