Note: The following information applies only to QuickBooks Accountant and QuickBooks Enterprise Solutions.
The beginning balances in a client's books for the review period can be different from the balances from the accountant's records for the previous period. This feature displays the differences in balances and suggests adjusting entries to correct the opening balances.
For the first review that you perform with this feature, there are no Balances in Accountant's Records for a prior review period. You must enter these balances with information that you have from the last review. After the first review, the balances are saved when you complete the review. From the second review forward, you will not have to enter any balances manually. After the balances are entered, either manually or automatically, the rest of the process is the same.
Enter the prior transaction period dates
Enter the from and to dates and the basis for the prior review period in the boxes at the top of the form. The prior review period usually ends one day before the current review period starts. The length of the prior review period does not have to be the same length as the currently period; however, the ending date must be current.
Enter or view balances
- The accounts are listed from the current chart of accounts. For each account with a balance, enter the amount from the prior review in either the debit or credit column, as appropriate. For the first review done with this tool, you can either enter the balances manually or have the tool copy all the balances from the Balances from Client's File columns into the Balances in Accountant's Records columns. The tool prompts you about copying the balances, and you only have to select Yes after message appears. If you let the tool copy the balances, it is very important to correct any of the prior balances that do not match your records..
- If you have completed a review with this tool for the prior period, both sets of balances display automatically. There is no automatic display of the Last Review Balances until at least one set of prior balances has been entered manually.
Examine the differences
After both balances are entered, the difference columns are filled in automatically.
- To view only the accounts with differences, check the "Only show accounts with different balances" box at the bottom of the window, or use the Alt-N shortcut.
- Quick Zoom is available for all transaction in the QuickBooks and the Difference columns. Quick Zoom brings up the Transactions by Account report for the selected account.
- The View Changed Transactions button brings up the Changed Transaction Report.
- The View List Changes button brings up the CDR Review list changes.
The Difference columns in the Troubleshoot Account Balances tool in Client Data Review shows the total of the differences between the Balances in Accountant's Records and the Balances in Client's File by account. You can Quick Zoom on an entry in the difference column to see all the transactions for an account or select the View Changed Transactions button.
Sometimes correct entries appear in the transaction list of the differences for an account and look like errors. Usually, this happens when entries are made after the review period that should be included in the period.
For example, if the review period in January 1, 2017—December 31, 2017 and entry for December 2017 is not completed until January 15, 2018, the Transaction Change Report shows all entries made between January 1, 2017 and today. If the list is long, it can be difficult to determine which entries are part of the balance difference and which ones were part of the entries made in the first two weeks of January 2018.
To solve the problem, change the dates on the Transaction Change Report to January 16, 2018—today. The review period is still January 1, 2017—December 31, 2017, but only changes made after January 15, 2018 are shown in the report. After the adjustment to the period dates, the list is ready for review.
Ask your client when data entry was completed for the review period.
- Use one day after that date for the beginning date on the Transaction Change Report.
- The ending date will always be today.
Correct the balances
If you have corrected any of underlying transaction and the balances agree, the difference columns no longer show a balance for that account. If there remaining balances in the differences columns, you can create an adjusting entry to correct the differences. Select the View Suggested Adjustment button to see an adjusting entry that contains line items for each entry in the differences columns.
You must make any required corrections to the adjusting entry, such as making sure it is in balance, that any A/R lines have corresponding customer, that you are not attempting to adjust A/R and A/P in the same entry. Once the entry is correct, select Save & Close. You are prompted if the entry is over 90 days old.
After saving the adjusting entry, you can reverse the entry to bring it into the current period. Usually, you want to reverse the entry.
You can make more the one adjusting entry to correct the balances. If you make an adjusting entry that adjust some of the balances, the differences columns are empty for the accounts covered in that entry. You can make another adjusting entry for the rest of the accounts. You must make multiple adjusting entries, if there are balance differences in both A/R and A/P.
Checking the balances
Any time you return to this feature during a review, the difference columns are recalculated. After you correct the balances, the difference column will be zero. Seeing zero balances in the difference columns verifies that the opening balances for the review period are correct.