I have a very small client who does most of his own accounting but has asked me to post correcting entries I proposed, one of which includes creating a new account.
The adjustment needed relates to Accounts Receivable. Basically, the GJEs will be to reclassify stale AR credit balances to a liability account. Client's regular receivables are in the default GL #1100. I plan to create a new account GL #1105 that is only for manual adjustments, leaving client's GL #1100 as a control account with only transactional (non-GJE) entries.
My preference would be to use the "Type" as Accounts Receivable, so that it's group that way to show total net AR in the financial statements. Is that going to cause any issues when the owner goes in to post invoices, payments, etc. (I.e., will it require him to select which AR account every time he goes to enter customer invoices and payments)? (Sorry, but I usually deal with large ERP systems and have never posted transactions in QuickBooks before.)
If it would cause issues, I'll use type "Other Current Assets", but my preference would be to have it net against AR, which it should.
Creating a new account wouldn't cause issues when your client posts new transactions. Let me add more information about this and help you further.
In QuickBooks, customer transactions post to the default Accounts Receivable (A/R) account. Thus, creating a new one won't prompt you to choose which A/R account to use.
You can choose to create a new A/R account for your client to show your total net. Kindly follow these steps:
Once done, you can use this account when you create journal entries for the manual adjustments.
Always know that you can leave a comment below if you have any other questions. I'll be sure to get back to you.