What is best way to void checks issued in a closed period.
Does the adjustment to cash and the expense dated in the current period ?
I tried to do this and i got a warning about adjusting a closed period and need tohave the credit to expense occur in current period not in prior period
This is how I handle this problem. However I use QB's Enterprise, but it should work the same way.
Due to accrual accounting, you never want to change anything in the closed period if you can help it, as this will usually change totals on your month end figures. After discussing with our accountant I proceed as follows;
First I write down all the info from the check I want to void. Make sure to note the date, amount and number. Then clear the check in the current period, as if it was paid.
Next make a journal entry to reverse the payment in the current period using the current date. That will put the money back into the bank account without changing any of the previous accounts used to pay the invoice.
Now you are ready to re-issue the check. You are simply going to write a check out of the bank account. Do not try an re-enter any of the previous information. You should note the invoice number in the memo field, and also that this is replacing a voided check. This way the original transaction stays in place, and does not change you earlier records.
Once you have completed the paperwork side of this, make sure you actually place a stop on the original check number with your bank!
I hope this work around is useful to you, and good luck!
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