It hasn't been that long ago that the majority of people didn't even notice if their Balance Sheet was out-of-balance. In fact, just a few years ago you could run the QuickBooks Verify Utility and it would tell you that "QuickBooks detected no problems with your data" but if you opened up the QBWin.log file you might see a message like the one shown below.
QB Verify Detected No Data Problems
QBWin Out-of-balance accounts
Looking at the QBWin.log file we see that the Inventory Asset account is in error, the calculated balance and the list (displayed) balance for that account are different. When the Balance Sheet (Standard) is called, it will typically be reporting the displayed balance because the Standard Balance Sheet queries a stored report format that simply posts the displayed values on the document. There are actually a lot of these 'stored procedures' making up the most commonly used report, the idea being that they allow the report to be displayed that much more quickly than a true report query requiring compilation.
Previously this problem was notice by so few people that finally Intuit decided that an 'out-of-balance' Balance Sheet was worthy of notation in both the QBWin.log and 'on screen'. So let's look at an example of that.
OOB Balance Sheet warning
The Balance Sheet (Standard) above has the now all to familiar warning the Balance Sheet Out of Balance. If we were to examine this Balance Sheet from top to bottom we would indeed see that Total Assets equal $6,633,795.62 while the Total Liabilities & Equity equal $6,857,518.60 which represents a $223,722.98 out-of-balance situation.
"That's horrible, an out-of-balance balance sheet, what has the accounting world come to?" There has to be something funny going on here, right? Call the auditors, call the police, there has to be missing assets.
Hold on, hold on...this might just be a QuickBooks 'math error'. Now I have your attention, how could an 'accounting program' of all things make a math error. The answer is easy, the balance sheet is that stored routine simply list the displayed values already in the Chart-of-Accounts, it isn't computed...that's why it opens for display so quickly.
Intuit's warning message says, "don't worry, most of the time you can easily fix the problem by rebuilding your company file". If you look up this error in the QuickBooks Community support site you will see they tell you the most likely causes are 'data damage', 'linking improper transactions together', and 'multi-currency'. They don't mention a thing about computation (or non-computational) errors as they relate to the Balance Sheet.
But, you can actually force QuickBooks to 'do the math' and compute the Balance Sheet without Rebuilding your Data. Just select a balance sheet that compares more than one period, or add a comparison column. In the example below we have added the 'Previous Period' column for display.
Even though I have had to 'split to shrink' the overall balance sheet from top-to-bottom, I want you to notice that the middle column represent the same report date as in the example above now has a matching Total Liabilities & Equity figure of $6,633,795.62 which equals the Total Assets in my example above (even though you can see both Total Assets and Total L&E below). In other words, this Balance Sheet now is 'in balance' without having to Rebuild QuickBooks data.
Multi-period Balance Sheet in-balance
The difference resides exclusively in making QuickBooks do the work of actually computing the Balance Sheet account-by-account, rather than simply displaying the 'displayed balances' as a result of a called report routine. Unfortunately, the computed balances don't stick within the program. So, if you open the Chart of Accounts you will still notice that the 'displayed balances' are the erroneous amounts matching the displayed balances in the Balance Sheet (Standard). Only if you Rebuild the data will QuickBooks update the otherwise 'erroneous' balances.
But what's a few wrong balances, after all, this is 'just accounting software.'