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How do I get rid of old unused (asset) accounts? Also how do I fix a large negative accounts payable?

How do I get rid of old unused (asset) accounts.

Question 1. Petty cash fund has a negative value in quickbooks, should I withdraw money equal to the negative balance to make the balance 0? What happens to the cash, it was never used?

Question 2. Inventory has a balance from several years ago, we no longer use inventory, and everything is expensed through cost of goods sold. How do I get rid of the inventory account? It should be stated as 0 because we do not use inventory?

Question 3 How do I fix a large negative accounts payable? I have identified the mistake as most likely being the example below.

DR - COGS // CR - AP then another entry of DR - AP // CR - Credit card# then the error that is DR - AP // CR - Checking

So in theory, I have a large credit card liability now, which is probably not true, and a very negative accounts payable. Any solutions would be greatly appreciated.

Thanks!

Solved
Best answer 12-10-2018

Accepted Solutions
Established Community Backer ***

"so I went to chart of accounts, double clicked into acco...

"so I went to chart of accounts, double clicked into accounts payable and scrolled up a little."

That means you are looking at that account's Register. Don't Use the Register. Each of these is a Transaction and you see their Type, such as Bill or Bill Payment. Double-click it to actually See This Transaction on the screen. The Register is not the place to work from.

"The line reads as such:

6/17/16 | ET | "

I am not familiar with "ET" but that might be some sort of Electronic Transaction from online Banking? Open it to see if it has Items tab and Expenses tab, or just a list of Bills, in the Bottom Half.

See why Text is not a good enough tool?

"XYZ Bank 1234(Now 1235) | 1001 Checking---ABC Bank |       |Billed(in grey) | 5,000"

I don't understand why this would be Bank to Bank. This view is Not Good Enough.

"I'm fairly certain its a transaction?"

Yes, but this is Not its true View.

"Is this a Journal Entry, with Multiple lines as debits and credits?"

Double-click it to know.

"Or some sort of report?"

A Report is just a report; it doesn't "post anything anywhere". It is a report showing data from the file in a Report format.

"I did the same thing as above and read off one journal entry(?) and a few lines down the line that matches with the payment of that journal entry."

Did you run the AP Aging Report? What do you see when you use the Pay Bills screen?

You can take these video tutorials:

2015 and 2016 video tutorials

I attached AP screenshots.


View solution in original post

9 Comments
Established Community Backer ***

"so I went to chart of accounts, double clicked into acco...

"so I went to chart of accounts, double clicked into accounts payable and scrolled up a little."

That means you are looking at that account's Register. Don't Use the Register. Each of these is a Transaction and you see their Type, such as Bill or Bill Payment. Double-click it to actually See This Transaction on the screen. The Register is not the place to work from.

"The line reads as such:

6/17/16 | ET | "

I am not familiar with "ET" but that might be some sort of Electronic Transaction from online Banking? Open it to see if it has Items tab and Expenses tab, or just a list of Bills, in the Bottom Half.

See why Text is not a good enough tool?

"XYZ Bank 1234(Now 1235) | 1001 Checking---ABC Bank |       |Billed(in grey) | 5,000"

I don't understand why this would be Bank to Bank. This view is Not Good Enough.

"I'm fairly certain its a transaction?"

Yes, but this is Not its true View.

"Is this a Journal Entry, with Multiple lines as debits and credits?"

Double-click it to know.

"Or some sort of report?"

A Report is just a report; it doesn't "post anything anywhere". It is a report showing data from the file in a Report format.

"I did the same thing as above and read off one journal entry(?) and a few lines down the line that matches with the payment of that journal entry."

Did you run the AP Aging Report? What do you see when you use the Pay Bills screen?

You can take these video tutorials:

2015 and 2016 video tutorials

I attached AP screenshots.


View solution in original post

Established Community Backer ***

Q1, You listed the use of Petty Cash, but you never Fille...

Q1, You listed the use of Petty Cash, but you never Filled the petty cash account. Where did the money come from, that was being Spent? That is what you are missing and that is why it is negative = just Outflows, no deposits of Cash to make it available. Whose money was spent?

Q2. You have to see if there is qty and value, and all of that is adjusted to 0. That means this is something you need to review with your CPA, because the question is: QB considers this value and stuff still exists. How is it not on hand, but also not sold? They will guide for you the offset of the accounting values.

Q3: Negative = more AP payments out than you ever accrued using Enter Bills to be paid later.

"then another entry of DR - AP // CR - Credit card# then the error that is DR - AP // CR - Checking"

"DR - COGS // CR - AP"

That implies a Bill, waiting to be paid, for purchase of materials as COGS expense.

"then another entry of DR - AP // CR - Credit card# "

That implies AP has a balance moved to the Credit Card account. This is:

A bill for a vendor, and I will pay it later; oh, loo, I found out they accept CC, so I just put the Bill Payment on the Card. If that is true, these two can be applied to each other as a Vendor Credit and open Vendor Balance. They need to be for the same Vendor Name, of course. This is not how you enter Bills or Credit Card Charges, of course, but at the least, they should be applied to each other.

"then the error that is DR - AP // CR - Checking"

That would likely be a Check from Checking to pay Credit Card, not AP.

Moving a liability (CC) to or from another liability (AP) is always a problem. There is not Bill for CC; that is your Statement that you use to reconcile the CC account.

So now, you have to figure out if that credit car account payment is Also in the data file using a different method. It likely is in there twice.

By the way, I know a CPA who constantly clears the Year End CC balance to AP; which is a Mistake and is making a mess of their client's data. These are Both Liability; you don't need to do anything to them at year end, as long as they are properly Verified that the entries are really still owed.


Not applicable

@qbteachmt So for petty cash, it is our checking account...

@qbteachmt

So for petty cash, it is our checking account that is taking money out to put into the petty cash, but they don't/have not updated this amount in so long. Is there any way for me to put money into the account just to zero it out? Will this show up on any profit and loss statements seeing as how petty cash is just another asset account and not a expense until it's used?

If i move the cash from my checking to petty cash, my checking is messed up and highly overstated as well.
Not applicable

@qbteachmt Question 3,  yes, you're scenario is perfect....

@qbteachmt
Question 3,  yes, you're scenario is perfect. A bill needs to be paid, so it was recorded as an accounts payable, and expense to COGS, then the OLD accountant entered CC to pay off the accounts payable.

However, instead of paying off the CC Liability, they made a cash payment to accounts payable.
Meaning right now, there is a very large liability for a "credit card liability" and a very large NEGATIVE accounts payable.

This definitely is not the right way, however I was hoping you had the solution to get it to the right amounts?

I am not sure of what you mean when you said,

"If that is true, these two can be applied to each other as a Vendor Credit and open Vendor Balance. They need to be for the same Vendor Name, of course. This is not how you enter Bills or Credit Card Charges, of course, but at the least, they should be applied to each other."

They are most likely not all from the same Vendor, this would be an accumulation of all the vendor balances.
Established Community Backer ***

"it is our checking account that is taking money out to p...

"it is our checking account that is taking money out to put into the petty cash, but they don't/have not updated this amount in so long."

Then they overlooked a lot of bookkeeping activities.

"Is there any way for me to put money into the account just to zero it out?"

If it is running negative, you need to know where the money can from that they keep spending. If that is from Checking, then you need to look at Checking to find those withdrawals that were entered incorrectly, likely as Expense and not as posting to petty cash to be spent later.

"Will this show up on any profit and loss statements seeing as how petty cash is just another asset account and not a expense until it's used?"

Petty Cash Activities will be P&L, if spent on expense or gotten as income. Transfers between check and Petty cash are neither expense nor income. This is you, moving around money you already own.

"If i move the cash from my checking to petty cash, my checking is messed up and highly overstated as well."

You don't do this now, unless this is a real entry. You should do this for Real activities, not made up activities.


"A bill needs to be paid, so it was recorded as an accounts payable, and expense to COGS, then the OLD accountant entered CC to pay off the accounts payable."

As long as they used Pay Bills, this would be fine. Pay Bills "from" the CC account creates a "Credit Card Charge" transaction and on that transaction you see on the Expense tab AP. Prove this: Open that bill and use History Icon, then GO TO the bill payment from here.

"However, instead of paying off the CC Liability, they made a cash payment to accounts payable."

I don't understand what this means. If you make "Cash Payment" that had to come from somewhere and is some sort of Transaction Type: Check? JE? Bill Payment? Vendor Credit?

"Meaning right now, there is a very large liability for a "credit card liability" and a very large NEGATIVE accounts payable."

Negative AP means vendors are overpaid.

"This definitely is not the right way, however I was hoping you had the solution to get it to the right amounts?"

We cannot see this. Nothing hits AP generically. Everything is By Name. Run your AP Aging Summary report.

"They are most likely not all from the same Vendor, this would be an accumulation of all the vendor balances."

There is NO such AP activity. You cannot generically manage AP in QB. At the least, they would create a phony vendor name. To see this, run AP Aging Summary.




Not applicable

"Then they overlooked a lot of bookkeeping activities."...

"Then they overlooked a lot of bookkeeping activities."

Yes, precisely why I want to restart because I don't feel like quickbooks is going to reflect true data.
=======

xxxxHowever, instead of paying off the CC Liability, they made a cash payment to accounts payable."

I don't understand what this means. If you make "Cash Payment" that had to come from somewhere and is some sort of Transaction Type: Check? JE? Bill Payment? Vendor Credit?xxxxxx

I meant to say Check Payment to accounts payable. That is why it is showing as vendors are overpaid.
==========


xxxxxAs long as they used Pay Bills, this would be fine. Pay Bills "from" the CC account creates a "Credit Card Charge" transaction and on that transaction you see on the Expense tab AP. Prove this: Open that bill and use History Icon, then GO TO the bill payment from here.xxxxx

Can you possibly do a step by step on this, I'm still fairly new to quickbooks. My entries are looking like

Vendor X          COGS                  500

then further down

Vendor X          VISA 1234            500

This by itself I do not see the issue, however there are entries that look like this:

BANK CC 4321           CASH ACCOUNT: CHECKING              BILLED(in grey)              5000

I tried right clicking on these to do a transaction history, and it says it does not exist. Is this a transfer? If so what was the purpose of transferring anything to a negative accounts payable?
==========


As for the generic AP question, I ran the AP Aging Summary report, a list of the company vendors came up, and most of them have positive values, which is good. but then there is a negative 6 digit value for what appears to be how they named the CC, which is confusing me now.

Does this mean they labeled some CC's as accounts payables?
Established Community Backer ***

"I meant to say Check Payment to accounts payable. That i...

"I meant to say Check Payment to accounts payable. That is why it is showing as vendors are overpaid."

You need to Open that check and see what Vendor name is next to the AP entry. You cannot post to AP without a Name assigned.

There is no transaction type of "Check Payment" in QB. There is Check or Bill or Bill Payment. Please tell us what you see for Transaction Type, in the title bar of that transaction when viewing it.

"My entries are looking like"

Is this a Journal Entry, with Multiple lines as debits and credits? Or some sort of report?

"This by itself I do not see the issue, however there are entries that look like this:

BANK CC 4321           CASH ACCOUNT: CHECKING              BILLED(in grey)              5000"

What are you looking at? A transaction? A report? A register view?

"I tried right clicking on these to do a transaction history, and it says it does not exist. Is this a transfer? If so what was the purpose of transferring anything to a negative accounts payable?"

I think we are exceeding the ability of a text-based internet forum. You have a puzzle that must be seen and followed to understand. I recommend you get help directly, one to one, off this text forum.
Not applicable

Okay, so I went to chart of accounts, double clicked into...

Okay, so I went to chart of accounts, double clicked into accounts payable and scrolled up a little.

The line reads as such:

6/17/16 | ET | XYZ Bank 1234(Now 1235) | 1001 Checking---ABC Bank |       |Billed(in grey) | 5,000

I'm fairly certain its a transaction?


Is this a Journal Entry, with Multiple lines as debits and credits? Or some sort of report?

I did the same thing as above and read off one journal entry(?) and a few lines down the line that matches with the payment of that journal entry.

The lines read as such:

6/15/16 | 11111 | Vendor Corporation | COGS: Items | Paid | 100

then a few lines down

6/15/16 |    | Vendor Corporation | Visa 1234 |    |     | 100

Sorry I'm not of more help... I am fairly new to quickbooks.
Not applicable

Re: Okay, so I went to chart of accounts, double clicked into...

Truthfully you need to reconsolidate the bank going as far back as that period is and see from there. Also if there is another system to record transactions and such you will want that. Go back from the beginning of the mess up, see how it goes in and what you can switch it to that goes seamlessly with the company and the logical explanation and to tie it out to the tax return (month by month and year by year.) If it's past 7 years I would say make a balancing entry just to tie everything out and if it's a one to two owner company that's not a varying contributor partnership use retained earnings and/or shareholder loans and loans to shareholders for the debit/credit journal entry. Also remember tying out to the tax return is recommended and then also look to see if he return might be calculating depreciation differently.

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