Purpose of the Opening Bal Equity Account

QuickBooks automatically creates the Opening Bal Equity account when you create a new data file. The Opening Bal Equity account serves the following purposes for a new data file:

• To keep your books in balance during the opening entries.
  
  
• To provide a common register so you can easily view your opening entries before “closing” to the Retained Earnings account.
  
  
• To function as the account used for bank reconciliation adjustments in QuickBooks versions 2005 and earlier. Beginning with QuickBooks 2006, bank reconciliation adjustments are posted to an expense account automatically created by QuickBooks called Reconciliation Discrepancies.