cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Adjusting journal entries and accounts payable

The accountant provided adjusting journal entries and one is for rent expense that was booked in current fiscal year but he made an adjustment to book it in previous year end.  The entry is Accounts Payable (credit) and Rent Expense (Debit).  When I enter the vendor name it now shows payment is due to that vendor but this is incorrect.  Payment has been made.  How to correctly enter this.

Solved
Best answer 03-11-2019

Accepted Solutions
Level 6

You should ask your accountant. Many entries like the one...

You should ask your accountant. Many entries like the one you describe are created  for accurate financial recording in the previous year and should be reversed on the first day of the current fiscal year. 

View solution in original post

6 Comments
Level 6

You should ask your accountant. Many entries like the one...

You should ask your accountant. Many entries like the one you describe are created  for accurate financial recording in the previous year and should be reversed on the first day of the current fiscal year. 

View solution in original post

Level 1

Thank you. The accountant wanted to put the cost in the p...

Thank you. The accountant wanted to put the cost in the previous fiscal year even though it was paid in this current fiscal year. I was not sure how the would affect the books. There were other year end adjusting journal entries provided where he booked in Accrued Liability and in the Cost Account. For example Accounting Fees for which I have not received his bill yet. For something like this once the bill comes in would you just expense it to Accrued liability or would you reverse this Adjusting Journal Entry as well?
Level 6

I know you teach this, but the OP is asking about a year...

I know you teach this, but the OP is asking about a year end adjusting entry from the Accountant - not creating a JE to record rent.

Level 15

You "put the cost" by using Enter Bill. The function of "...

You "put the cost" by using Enter Bill. The function of "Credit to AP" = Vendor Menu > Enter Bill. There is no debate here; there is a Program with Tools and the accountant has given us instructions on what they Need to see, but we control HOW we will do it, by using the proper transaction for affecting AP. Credit AP = Enter Bill. The accountant gave them JE, but we don't use JE in QB for AP. Read the opening question again. And just becuase you don't have a "bill" in hand, if there is a need to Accrue an expense, that is Enter Bill, not JE. You don't need to JE "accrue liability" because AP already is a Liability. For instance, Bill to pay Accounting Fees expense = you just Accrued the expense as a Liability (AP) to be Paid Later, using Pay Bills. There is no JE and you don't reverse it. Any time you are told to make a JE to put Names on them, that is Enter Bill or Vendor Credit, for AP. For customers, the AR is not JE; it is invoices, receive payment and Credit Memos. This is a QB user forum and these are QB Transactions. A JE bypasses cash vs accrual basis, isn't seen as an AP or AR transaction, doesn't allow you to use items, bypasses Sales and Purchase reporting, bypasses Tax calculations, etc, etc, I really could go on and on about using JE for anything Name-related. You also don't need to use Enter Bill to pay CC or Loans; those are Already Liability type of account activities. Moving one liability to another doesn't make much sense, unless you are paid by the Transaction Count. Using JE makes quite a mess in the file. AP JE and Reversals are not Linked, and won't be seen in Vendor reporting or purchases. I really could go on :)
Level 15

"The entry is Accounts Payable (credit) and Rent Expense...

"The entry is Accounts Payable (credit) and Rent Expense (Debit)."



Never make a JE like this. That is Vendor Menu > Enter Bill. They need you to Enter a bill for the vendor name and not a JE. They don't know QB very well, apparently.
Level 15

Oh: if payment has been made, as Write Check, and you are...

Oh: if payment has been made, as Write Check, and you are a Cash Basis entity, they should never have you Accrue Rent like that. Or, you are an accrual basis entity. That means your Check written in the new year should have been a Bill Payment Check. Change that check to show AP on the Expenses tab, then link it to the open bill using Pay Bills, where it shows the available credit.