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Owner account not clearing at year end

pastakppastakp Member Posts: 1

Hi
New to dealing with Owner's Accounts and I'm looking at the Balance Sheet Dec 31 2017 and it includes transaction and the balance back to 2015. How do I balance the account so it starts at $0 for 2018

in Accounting Technical Support

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  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Hi, @pastakp.

    Your balance sheet will always take into account your previous years' earnings. It's consolidated under Previous Years' Earnings. Since your balance sheet is a snapshot of everything you own and owe, as well as everything you've gained and lost, it will always take into account your past earnings.

    If you're looking for how to close out your year in Wave, here's the good news: you don't have to.

    Other accounting platforms don't allow you to touch historical data, but in Wave, you can pull up reports and make adjustments at any time. This means that your previous years never really "close". All that happens at year-end is that current year earnings get zeroed and added to previous year earnings.

    At the start of your new fiscal year, you will see your new previous year earnings balance, fresh income and expense account balances, and your usual bank account balances.

    What Wave doesn't do is put those amounts under a common account, such as retained earnings, that you can post transactions to.

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