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SG91
Level 3

Journal entry to correct journal entry?

I came into a QuickBooks mess with the company I currently work for, as previous bookkeepers and accountants made several errors. Even though we are aware that the accountant also contributed to the errors, I still hesitate to correct anything she's done. I'm trying to fix a liability account. The accountant made journal entries in this liability account to adjust the balance but left no memos, so I don't know what the journal entries are for because neither of them correct the errors in the account. I found all the original errors and figured out how to bring the account current, except for those 2 journal entries she added. Because the account goes back as far as 2018 and some of the errors date back just as far, crossing accounting periods, I'm hesitant. Would I be able to create a journal entry simply to cancel out the previous journal entries, in order to create a new journal entry that actually corrects this account and brings it current? 

1 Comment 1
john-pero
Community Champion

Journal entry to correct journal entry?

Your company has done wel tomrid itself of an accountant that did not at least annually reconcile loan liabilities

 

Without knowing exactly how the errors cropped up the safest journal entries woukd offset owner equity.  If younknew for certain that it was paid but unposted interest, for example, you could post the offset to that but interest booked tnis year has to match lender statements, hencenthe safett of equity as the offset

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