You are reviewing the Client Overview tab for a new client to determine the scope of a bookkeeping clean-up engagement. You notice that there is a large amount in the Opening Balance Equity account. Which 3 reasons could be causing this balance?

1. Issuing more common stock is one of the significant reasons for the company that causes a large amount in the opening balance of the equity account.

2. Issuing excess preference stock to involve the investors can be the other reason to get a higher amount of beginning equity balance.

3. Making much profit for the prior years, and keeping them with the retained earnings without expanding the business can be the third reason.

jayilych4real jayilych4real · Answer 2 · 2022-04-19T12:50:29+02:00

One of the reasons that could be causing this balance is that the client has added transactions in the Banking Center without assigning an account to them.

What is Bookkeeping?

This refers to the financial activity of keeping financial records of a company for accounting purposes.

The other answers are:

The client entered an Opening Balance when creating a new Other Current Asset account
Opening balances were included when importing Customers, using the Import Data tool

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