Bank account amount wrong when doing VAT adjustment

Forum|Forum|3 years ago
April 14, 2023
6 replies
10 views

I made a VAT adjustment due to under payment and Quickbooks has added the adjustment as income into my Bank account.

Example :

VAT was £5000

Vat Adjustment £2000

Total VAT due becomes £7000

Quickbooks adds £2000 to my bank balance for no reason. I am paying VAT so why is it increasing my bank balance by £2000 in this example.

How would I correct this incorrect entry

QuickBooks Online

Ashleigh1

Level 14

Hello skjdfhdesfvkhj, thanks for posting on the Community page, When you created the adjustment you won't have changed the adjustment account which defaults to the top account on the account list, which is usually a bank account. You will need to delete the adjustment and recreate it using an appropriate adjustment account.

skjdfhdesfvkhjAuthor

When I try to delete the adjustment it wont allow it. Tried to create a journal entry, that cant be done as the Bank Account does not appear in the list, tried to do a transfer from the bank account to the VAT Control account that's blocked as it says used by system.

I just need to transfer the money from the bank account to some form of VAT Adjustment account, how do I do that

emmam6

You can't delete the journal entry its not allowed, its the first thing I tried, the system prevents this as it states that it is in a previous VAT period.

I assume the only way to rectify this is to create some type of corrective entry, to reverse the change.

Hello skjdfhdesfvkhj

The above solution would be for an adjustment the user has not already submitted their VAT return. The alternative if the VAT return has been submitted (the original post did not say it had, so my apologies for that. I will edit my response) would be to reverse the Journal entry or create a new journal entry which is a reverse of the one created with the adjustment with the same date or unfile the VAT return in QuickBooks and then delete the journal and recreate the correct entry and refile.

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