Correcting a reconciled expense from a prior tax year

Al R in LA · ‎January 30, 2020

Small biz owner, not a CPA so bare with me... I discovered an issue where a credit card transaction from a prior tax year was not treated correctly when it was added via QBO online banking and has since been reconciled and reports/taxes for that period (2018) are long done and filed. The situation:

-A downloaded charge in 2018 from credit card (Card A) that should have been assigned to an expense account, was instead somehow assigned to a different credit card account (Card B) as a credit. (probably a user error with the account dropdown in QBO Banking.)

-The Card B account still shows this credit (and it sits uncleared/unreconciled of course) but the register balance still reflects this credit that shouldn't be there. I'm tempted to delete it but that would causes a problem with the reconciled Card A account if not the year end reports

The amount is somewhat trivial (about $130) but what is the right way to fix this in a way that doesn't throw off 2018's income and balance statements? I'm assuming journal entry(s) of some kind are in order.

Anyone?

Ashley H · ‎January 30, 2020

Thanks for reaching out to the Community, @Al R in LA. You've come to the right place.

Since the Credit Card B account hasn't been reconciled yet, we can move the transaction to the proper account (Credit Card A). In just a few steps, you'll have your books squared away. Here's how you can move the transaction:

Go to Accounting, then Chart of Accounts.
Navigate to Credit Card B account, then click on View Register.
Locate the transaction. Once you've found the transaction, press on it to view more details and select Edit.
Under the Account drop-down menu, choose Credit Card A.
Hit Save and close.

That's all you need to do! This will move the transaction to the proper account and it won't mess up the previous reconciliation. Now you can reconcile Credit Card B without any trouble.

If you have any further questions or concerns, don't hesitate and reach back out. Have a great day!

Al R in LA · ‎January 30, 2020

Thanks Ashley but that does not solve this specific issue, this is more of an accounting best practices question than how to technically accomplish it in QBO.

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Correcting a reconciled expense from a prior tax year

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Correcting a reconciled expense from a prior tax year

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