Deleting old liability accounts

My issue is that I do not know which account to use against it to make it zero. The old accountant/bookkeeper for my firm does not want to help with any of the books and the accountant the company uses does not want to do anything but taxes. In other words, there is no one to ask for help. 

If someone could even give me an idea of what account to use against it to bring it to $0, I could try it and see how it affects the books.

Supposedly the situation is that my boss was given $38,500.00 to manage for a lady named Knight. The company gave her $500.00 per month from 01/07/2013 to 04/15/2019 for a total of $38,500.00. The way the accountant entered this, I do not see the initial deposit for $38,500.00 - she just created a Knight account and started deducting $500.00 from the business bank account until it reached $38,500.00. In QB each month there is a check written from the bank account and paid to Knight, and it is expensed against the Knight account.

I am having the same problem. We have old liability accounts with a negative balance that will never clear to zero. Did you find a solution to this issue? I know it can be journaled out but what account should it go against? 

Same problem here. I found a transaction from 2016 (!) that went to a current liability account that should have been an expense for over $7300. I could do a journal to clear the liability side, but then I create an expense showing up this year that is not accurate. Help!

Thank you for visiting the QuickBooks Community, sooverit2. Please know that we aim to deliver customer satisfaction at all times that's why we fix and address an issue as soon as possible. With this, may I ask for additional information on the created expense account that show up this year and caused inaccurate data you had in QuickBooks? I would appreciate any further details so that I can provide an accurate solution.

For now, you may refer to this article to view steps on how you can edit or reverse a journal entry in QBDT: Create a journal entry in QuickBooks Desktop for Windows or Mac.

Please don't hesitate to click the Reply button below to add extra information or let me know if you have other questions. I'm always here to assist you. Take care always and have a good one.

@sooverit2 

If you create a journal entry to clear a liability, and the corresponding credit is to an expense account, you will be reducing, not increasing, expenses.  That will increase your income.  You may want to confirm your entry from 2016 because having both a $7,300 expense and a $7,300 liability in the same transaction is very common.    

Hi - 

I was recently hired to replace retiring bookkeeper and I just found this issue now. The Current Liability ("Prepaid Rent") account is for last month's rent which is applied to the last month's rent invoice when a renter vacates. The expense account is "Rent Paid" which is the business's rent/lease payment to the land owner and it is not a new expense -  no one noticed it before. The business leases the property from the land owner and rents out existing buildings on the property. It seems that no matter which way I go, I will be creating a problem with the financials either then (2016) or now.

Yes, the Net Income would show as an increase. The 2016 entry is verified and incorrect. 

@sooverit2 

Instead of crediting an expense account in the journal entry, it makes more sense to credit an 'other income' account.  That way, the income is booked in the section below income from operations on your income statement and it is easy to identify that this income is not part of 2022 income from operations.    

Thank you! That works!

Since that seems to have worked for a liability - I have an issue...I have old equity accounts on our balance sheet from 2013 and earlier.  I want to get them off the balance sheet but have no idea how to do that.  The only responses I've received so far are "just delete them" which doesn't seem to make any sense at all.  I included the actual part of the balance sheet (I'm desperate!).  Neither the CIF (I don't even know what the bookkeeper meant by that - no one does) or the fund balances have been used since 2013  - but they seem like large numbers to just delete.

Hi there, @mhcostigan. I'm here to ensure you'll be able to get the balance off of the old equity account in your balance sheet. 

To prevent deleting the equity accounts and the transactions under them, you can use the Journal Entry feature. To do so, I recommend reaching out to your accountant for guidance. This is to ensure that your balance sheet report will have accurate data, and avoid messing up your books since we're dealing with old accounts. 

Before doing the process, it's recommended to create a backup copy of your file to ensure you have the original data that can be restored in case of data loss or damage. 

After that, feel free to check this article for detailed steps: Create a journal entry in QuickBooks Desktop for Windows. 

I've also added this helpful resource that you can use as a guide in managing your Balance Sheet reports whenever you encounter issues: Fix a Balance Sheet that's out of balance. 

If you have any other concerns managing your equity accounts in QuickBooks, please don't hesitate to post again here. I'd be happy to provide additional assistance. Have a good one. 

Thank you for the clear solution. I had a very similar issue and found your solution worked perfectly for a prior year's error.

You're Welcome, @RDeeJ.

We're glad that the posted recommendation is of help.

If you require further assistance working on specific tasks in QuickBooks, the Community is willing to assist you at any time. Have a great day ahead!