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allenbooks2020
Level 2

Leftover Credit Card Balance From Prior Period

I'm currently in Quickbooks Desktop with a client who paid off their credit card in 2019, however there remains on the books a credit card balance of $248.88. 2019 taxes have already been filed, so I'm trying to figure out how to make an adjustment for a prior period in order to clear out the balance.

 

I understand how to do this for checking accounts which are assets (DR Checking, CR Retained Earnings), however since a Credit Card is a Liability account I'm trying to figure out how to handle it.

 

If I DR the credit card account (to reduce the balance), I'm trying to figure out which account to credit. If I credit the checking account, it reduces my balance which then throws off the reconciliation in the checking account (plus it was paid off in 2019, a prior closed period). And I can't CR Retained Earnings to offset because that would Increase RE.

 

Any thoughts on how to handle it?

 

Thank you!

Solved
Best answer December 29, 2020

Best Answers
allenbooks2020
Level 2

Leftover Credit Card Balance From Prior Period

Found my answer! DR credit card account, CR Owner Contribution.

View solution in original post

3 Comments
BigRedConsulting
Community Champion

Leftover Credit Card Balance From Prior Period

If the balance in QuickBooks is wrong, the first thing to do is to fix that by fixing the transactions in the account so they match what really happened.

allenbooks2020
Level 2

Leftover Credit Card Balance From Prior Period

Thank you for responding. My concern about fixing the transactions is that they occurred in prior years that are now closed and for which taxes have been filed. 

allenbooks2020
Level 2

Leftover Credit Card Balance From Prior Period

Found my answer! DR credit card account, CR Owner Contribution.

View solution in original post

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