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Level 1

Zero out a liability account

I took over books from a previous bookkeeper. There is an Other Current Liability account that contains  duplicated client payments that never got entered as returned to the client. This goes back 5 years. The payments were returned but never entered into QB. What type of account would I offset this to zero it out?

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Zero out a liability account

Somewhere 5 years ago the refund checks were cut. Presumably if from business checking those checks would have been entered and reconciled. If you can find those it is a matter of tying the two together.

 

 You could create current credit memos and apply them to the ocl. The canceling of this old hanging liability will involve a credit of an asset or equity account. To keep from having to upset bank reconciliations the safest thing to do, in my opinion, is create a journal entry today, Debit Other Current Liability and Credit Owner Equity. If you have not done taxes yet you might use 12/31 as journal date.

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