Quickbooks FAQ
Quickbooks FAQ

My Profit & Loss accounts are showing a zero balance.

Expense and income accounts are called transitory or temporary accounts in regular accounting terms. At the end of each fiscal year an automatic entry will "zero out" the income and expense accounts and transfer the net amount, Net Income or Net Loss from your Profit & Loss, to the Retained Earnings account on the Balance Sheet.

There is no action required on your part. This is a normal accounting function affecting all companies.

Note:  Closing the books will not zero out the income and expense accounts.  The amounts in these accounts will only be moved to Retained Earnings at the end of the fiscal year.