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Level 1

Journal Entry to clear out old entry.

In the early years when we first started this company, we hired a CPA to do year-end taxes. Each year they did some closing entries at the end of the year and over time, these affected Accounts Receivable by over $2000. These amounts show up as 'open' in the monthly report I generate to track what we are owed, so it appears it's overstating our Accounts Receivable. These transactions are now 10+ years old. 

 

Any ideas on how to make an off setting Journal entry that would somehow clear out these numbers?

Thank you!

Solved
Best answer April 02, 2019

Best Answers
Level 7

Journal Entry to clear out old entry.

This is a big problem when accountants are not familiar with the functions of QuickBooks.  In essence, what the accountant did was recognize income in a different period and/or write up customers that may have had a credit balance.  Either way income was overstated.

 

Short of filing amended tax returns, you need to correct this entry.  I assume these adjustments were recorded in your books using a generic customer.  You need to enter a credit memo in the current year then apply the credit against the journal entries through the receive payment function.

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2 Comments
Level 7

Journal Entry to clear out old entry.

This is a big problem when accountants are not familiar with the functions of QuickBooks.  In essence, what the accountant did was recognize income in a different period and/or write up customers that may have had a credit balance.  Either way income was overstated.

 

Short of filing amended tax returns, you need to correct this entry.  I assume these adjustments were recorded in your books using a generic customer.  You need to enter a credit memo in the current year then apply the credit against the journal entries through the receive payment function.

View solution in original post

Level 1

Journal Entry to clear out old entry.

Thank you so much! I have been looking at this for years and never took the time to ask for help. Your suggestion worked perfectly. 

 

Thanks for taking the time to answer my question.

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