Balance in Temporary Account

Balance in Temporary Account

Question:

Temporary Opening Account was used to update the opening balance. After updating the balance of each account on the Balance Sheet, is there still a balance in the Temporary Account? What is the reason for this balance, and how can it be reduced to zero?

Answer:

When updating opening balances in ERPNext, you must first ensure that the previous system's Balance Sheet is accurate (Asset = Liability).

Then, you update the opening balances for the preceding statement using Temporary Opening as the balancing account. When the opening balances for all Asset and Liability accounts are updated, the Temporary account's balance automatically becomes zero.

If you still have a balance in your Temporary Account, it could be for either or both of the following reasons.

1.The Balance Sheet used to update the opening balance was improperly closed, and its Asset and Liability values did not add up.

2.When the opening balance was updated in ERPNext, the Temporary Opening Account was inconsistently used.