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NNeese
Level 3

Unclaimed Checks Due Eventually to Another Entity

We are required by law to leave uncleared checks open for five (5) years and then turn over the funds to another entity. What is the best way to handle this without writing off the original expense in our books? If we create a check payable out, the other checks will still show as uncleared. If we instead just show the individual checks as cleared when in reality only one check out to the entity will be cashed, how would we know later on that these are related checks?

1 Comment 1
Jessica_young
Moderator

Unclaimed Checks Due Eventually to Another Entity

Thanks for sharing the details with me, @NNeese. Let's take a look at this together!  Because it has been five years, we'll want to create a journal entry here to make note of this original expense that has now been written off.  As a note, you should only use journal entries if you understand accounting or at the advice of your accountant.

 

Here’s what to do:

  1. Go to the Company menu and select Make General Journal Entries.
  2. Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
  3. Select Save or Save & Close.

To read more on journal entries, you can take a look at this article: Create a journal entry in QuickBooks Desktop for Windows or Mac.

 

Give me a shout if you have more questions on journal entries or anything else within QuickBooks! 

 

 

 

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