Unpaid Accounts Receivables

Good day, Missmissy.

Since you're using a cash-basis balance sheet, the old accounts receivable balances (2000-2008) shouldn't exist. They represent unreceived income that was never recognized on your P&L. Therefore, you can't write them off as a 2025 bad debt expense, as this would improperly reduce your taxable income for the current year.

The best way to zero out these accounts in QuickBooks Desktop without impacting your 2025 Profit & Loss is to use a General Journal Entry to debit Equity (or Retained Earnings) and credit Accounts Receivable. 

Here's how:

1. Navigate to Company and select Make General Journal Entries.
2. Enter the current date or the last fiscal date.
3. Select an equity account like Retained Earnings or Opening Balance and enter the total amount in the Debit column.
4. Select Accounts Receivable in the Account column and enter the total amount in the Credit column.
5. In the Name column for the Account Receivable line, select the specific customer(s) to reduce their individual aging reports.
6. Then, Save and Close.
    

Please note that if the amount is a total for multiple customers, you need to make this journal entry once for each customer, or use a dummy account called Cleanup if you don't need to track the individual names.

You're welcome to return to the Community for ongoing assistance.

Hi @missmissySEI,

I just wanted to follow up to check if the resolution we provided helped resolve your issue.

Please let us know if everything is now working as expected or if you're still experiencing any problems.

We'll be glad to assist further if needed.

Thank you so much for your help.  I was actually able to run the report and actually find the problem from the year 2000.  The past owner had entered invoices using an inventory item but sold it for a zero dollar price.  The inventory price was showing as receivables.  It sure does leave a long paper trail when you start to investigate.

Hi, @missmissySEI.

You're most welcome. We truly appreciate you sharing your scenario and thank you for your support.

If you have any further questions, please feel free to reply.