Opening Balances

[Former Member]

Hello Experts,

Generally we enter opening balances against an Opening Balances GL Account (say it is located in equity). As we know system will create journal entry with a credit to Opening Balance Account. This balances increases and will have the same $$ value as offsetting account. Do we need to do any adjustment after entering opening balances?

Here is a sceanrio :

-->AR Invoices are posted in SAP against Opening Balance Account

-->Inventory is posted via Inventory Opening Balances, Inventory Tracking, and Inventory Posting screen to Opening Balance Account.

Now, since journal entries were created with entry of opening balances, do we need to make opening balance account balances 0 by creating any adjustment or any process or nothing to do?

Please advise.

[Former Member · Accepted solution]

Hi Praneeth.......

You have three types of Opening Balances.

1. Stock

2. GL

3. Business Partner

If you enter all the above openings against SAP Offset Account under Equity drawer it gets zero automatically

It should be.......

Because one thing debit always does other credit. This mathematics is applicable to opening and its SAP Offset Account also.

Regards,

Rahul

[Former Member · Accepted solution]

Hi Rahul,

For Example, 2000 service invoices are imported against opening balance gl account. Say the total of all Invoices is 100,000.

Accts Receivable - AR balance will be 100,000 ( Sum of all debit entries from 2000 invoices) - This is fine, as customer pays invoices the balance will be reduced.

Open Balacing Account balance will be -100,000 ( Sum of all credit entries from 2000 Invoices, since invoices were posted to this account). How do i get rid of this balance or make it 0?

Inventory & GL Opening Balances will be against opening balance account, how to make all these 0?

[Former Member · Accepted solution]

When you do journal entries to create your opening balance sheet, the offsetting account should also be the opening balance account.

As your debtors and stock are part of the balance sheet and will NOT be part of this journal, this should clear the opening balance account to zero.

[Former Member · Accepted solution]

Dear Praneeth Putlur,

Rahul post is perfectly fine and right,

On that you ask your doubt when you create Rs.10000 account receivale againts you service bill your JV was.

Customer A/C debit 100000

Opening balance 100000

you just enter Asset side transaction you have to post Liability side opening balance.

at that time your entry will be

Opening balance account 100000 Dr

Liability account 100000 cr

You have to post opening balance of you all assets and liability side than your balancesheet will be tally and your Opening balance account 0 amount.

if your are opening balanace account balance is not 0 that its says you made mistake while putting opening balance.

Thanks & regards

MANGESH PAGDHARE.

[Former Member]

Hi Praneeth Putlur,

Why you need to Opening Balance Account Zero?

Any wrong entry pass in it?

Thanks,

Srujal Patel