Hi there, DavidK5.
When closing a book in QuickBooks Desktop, it creates a year-end adjustment that is based on your fiscal year start month. The program adjusts your Income and Expense accounts to zero them out and rolls up to your net profit or loss as your Retained Earnings. For additional information about how closing books works in QBDT, you can refer to this article: Close your books in QuickBooks Desktop.
It should add the net income from the previous fiscal year to your Balance Sheet as Retained Earnings. Since the FY2020 net income wasn't added to the Retained Earnings, I recommend running the Verify/Rebuild tool. This helps identify the most commonly known data issues within the file and resolves it. The Verify Data utility identifies any potential data damage issues that might've caused the accounts to show the same amount on the report. On the other hand, the Rebuild Data utility repairs damaged data in your company file. Before we begin with the troubleshooting, let's secure a backup of your company file.
Here’s how to verify:
- Go to the File menu.
- Select Utilities.
- Click Verify Data then select OK to close all windows.
To rebuild:
- Go to the File menu.
- Select Utilities.
- QuickBooks will ask to make a backup before rebuilding your company file, select OK.
- Once the rebuild is done, click OK.
For more details in verifying and rebuilding your QBDT, you can check out this article for reference: Verify and rebuild data in QuickBooks Desktop.
Please refer to the articles below to see different information on how accounts in the Chart of accounts categorize your transactions on everything from sales forms to reports to tax forms. Then, to see the list of the important year-end tasks to guide you through.
Let me know if there’s anything else that I can help with the account by leaving a comment below. Take care and have a wonderful day!
