What QuickBooks does at year end

QuickBooks reports reset your income and expense accounts at year end, so that you start the fiscal year reporting a zero net income.   In your old bookkeeping system, you may have had to make such adjustments yourself.

Suppose, for example, that your net profit for the year was $50,000.  A year-end balance sheet would show a line for net income of $50,000 in the equity section of the balance sheet.

At the beginning of the new fiscal year, QuickBooks increases your Retained Earnings equity account by the previous year's net income ($50,000 in this example) and makes your net income zero.

This Decision Tool focuses on Periodic Tasks.