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Join nowI am in need of Accounting help. Last year in 2019, the person before me, opened a long term liability account without entering the opening balance amount. She then continued to "credit" the vendor account for the amount that was owed MINUS the first payment. I know this is incorrect, believe me. But my issue is that I cant go back and fix it because 2019 is closed. Our CPA missed it as well (rolling eyes). How do I fix this? I have a vendor account that is credited, bills being written and paid through that vendor account and a long-term liability account that is wrong.
Opening balances are only entered when creating a liability if the liability existed prior to being added to the chart of accounts. If the loan funds were added to banking or used to purchase an asdet, the "opening" balance would have been half of that transaction. Loans, just like bank accounts, should be reconciled to statements.
Reconcile now or as of 1/1/20, add an entry to balance the account whether it is up or down. Post it against owner equity for now and let your CPA deal with it in January
This is a compliance fee that is paid over 4 years.
This is a compliance fee that is repaid over 4 years.
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