Sage 50 software has a feature that creates an equity account called “Beginning Balance Equity” to contain the difference or Sage 50 Balance Sheet out-of-balance amount in the General Ledger Accounts window. This account does not appear in the Beginning Balances window, but it will appear on financial statements and general ledger reports. Before proceeding, it is recommended that you find and correct the cause of the out-of-balance situation. If you cannot find the error, you can select OK in the warning message to proceed with setting up the company, but you will need to enter prior-period adjustments instead of Sage 50 beginning balances when posting transactions.
To resolve this situation, you should find the cause of the out-of-balance situation and correct it. If you have taken beginning balances from financial statements provided by a previous accounting system or accountant, ensure that you enter all data correctly and do not leave out any accounts or balances. If you cannot find the error, you can proceed with setting up the company and entering transactions by selecting OK in the warning message. However, once you post transactions, you must make prior-period adjustments instead of Sage 50 beginning balances. You can delete the Beginning Balance Equity account once it has no transactions associated with it.
To enter beginning balances for accounts in Sage 50, select the Beginning Balances button in the Chart of Accounts window, choose the period in which to enter balances, and enter all the amounts for each account. A running balance has kept for each period, so changes made to one period affect subsequent periods. Negative amounts can be entered if necessary.
To enter General Ledger Account Beginning Balances, follow these steps:
- Go to the Maintain menu and select Chart of Accounts to display the Maintain Chart of Accounts window.
- Select the Beginning Balances button to display the Select Period window.
- Select the period in which you want to enter beginning balances and click OK to display the Chart of Accounts Beginning Balances window.
- Add amounts to the white cells in the grid and enter all beginning balances for the accounts.
- Click OK when finished.
To add a new account in G/L Beginning Balances:
- In the Beginning Balances window accessed from the Maintain Chart of Accounts window, select the New button to display the Enter New Account window.
- Enter an account ID and description for the account.
- Select a type for the account and click OK.
The Maintain Chart of Accounts window has used to add, define, modify, or delete an account.
In conclusion, it is important for companies to take corrective action when their balance sheet is out of balance in order to improve their financial health and build a sustainable future.
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