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Level 3

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.

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Best answer March 11, 2019

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Level 6

Adjusting journal entries and accounts payable

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. 

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11 Comments 11
Highlighted
Level 6

Adjusting journal entries and accounts payable

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

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Level 3

Adjusting journal entries and accounts payable

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?
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Level 6

Adjusting journal entries and accounts payable

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.

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Level 15

Adjusting journal entries and accounts payable

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 :)
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Level 15

Adjusting journal entries and accounts payable

"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.
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Level 15

Adjusting journal entries and accounts payable

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.
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Level 1

Adjusting journal entries and accounts payable

Hope you can help.  My A/P is low by about $2,000 and has been for years.  The sum of outstanding invoices is $2,000 higher than the balance in AP on the Balance Sheet. Can I adjust A/P without creating a bill payable?  I can create a bill charging Misc. Expense and using vendor name "Misc".  A/P is then correct, but the bill shows up when I "Pay Bills"  How can I eliminate it without impacting A/P and Cash?

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Level 1

Adjusting journal entries and accounts payable

Then how do you clear the bill out of checkbook. Do you make a credit memo.  To zero it out? 

 

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Level 1

Adjusting journal entries and accounts payable

Doing a adjusting entry for a bill paid are the year end.  Accounts payable credit exspense credit.  The how do you get it out the the check register.  So you reconciliation will balance. My check bookif off the exact amount of the journal entry

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Level 1

Adjusting journal entries and accounts payable

Debit exspense

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Level 1

Adjusting journal entries and accounts payable

qbteachmt

I previously used Sage 50 so I am a little confused about your reply regarding how to enter accountant's bill for the year which was not received as yet.  What would be the date of the entry?  The last day of the previous year or the first day of the new fiscal year?  If you enter it as the last day of the previous year, wouldn't the amount of the expense be recorded in that previous year?  What happens when  you get the actual bill and the amount is less than what the accountant gave as year end adjustment entries?