Journal Entry

Hello there, @allen25glenn.

I'll help route you to the best support who can identify if deleting a journal entry is more appropriate than reversing it in QuickBooks Online (QBO), so you can keep your financial data accurate.

Journal entries are the last resort for entering transactions. You can reverse it if you need to update or correct its entries. Then, delete it if you've created the entry by mistake.

However, to choose the appropriate action, whether to delete or reverse a journal entry, I would encourage you to consult with your accountant. They can provide expert advice and direction tailored to your business needs.

In case you already have an accountant and you want to add them to your QBO account, here's how:

1. Sign in to QuickBooks Online as a primary admin.
2. Go to Settings or Gear ⚙ icon and select Manage users.
3. Select the Accounting firms tab.
4. Click Invite.
5. Enter your accountant's info and select Save.

Now that your financial data is accurate, you may also want to visit one of our Help pages as your reference in managing your QuickBooks account and your business's growth and transactions using QBO: QuickBooks Help and Support. It includes QuickBooks Help articles, Community discussions, and video tutorials, to name a few.

If there's anything else you need, or you have other questions about managing transactions in QBO, I'm always ready to help. Take care, and I wish you continued success, @allen25glenn.

@allen25glenn 

It is best to reverse it in the current period.  If you delete the entry, you are changing balances from prior closed periods that were reported on your financial statements and tax returns. 

I also tried that reversing on the current period but the Checking account resulted to a difference from quickbooks balance vs bank balance. How will I solve that?

@allen25glenn 

If the original entry was made in error, then your actual bank account balance should be higher than your QB bank balance by the amount of the journal entry because the transaction never when through the bank and should not have been cleared in QB.  Is that not what you see? 

Reversing the entry in the current period creates a bank deposit (debit) that can be used to clear against the outstanding, uncleared, journal entry made in error.

No , the quickbooks book balance is higher than the actual bank balance. I don't really know how to adjust this.

@allen25glenn 

These questions are difficult to answer on this forum without specifics. Is the QB balance higher before or after reversing the entry?  Or both?  How much is it off?  Is it the same amount as the journal entry?  Is the discrepancy immaterial?

I know it's really difficult. The transactions goes as this

12/27/19 Journal Entry      Dr Customer Advance  Cr Check      (this is the wrong entry that I mean)

12/27/19 Received Payment    Dr Check     Cr Accounts Receivable (advance payment for services to be rendered 2020)

But the advance payment did not go to the bank.  no details of check found in Dec 2019 Bank Statement and in Jan 2020 Statement.

That means,   There is uncleared checks and payments the same amount with uncleared deposits.

I deleted the journal entry so that uncleared payments will be removed, but did not. So there is the remaining uncleared deposits so I think that's why books balance is greater than bank balance.

So i think i'm gonna make the original journal entry (the wrong one) again so that the difference will be zero. I tried that before, I made a reversing entry, the difference appear but when i undo it, the difference goes back to zero. But then the negative customer advance account appears again.

@allen25glenn 

Agreed, you need to re-enter the original entry. 

If the payment was recorded as a credit to A/R, but the original entry for the customer advance did not hit A/R, then the A/R account is understated.  Make sense?  To fix this, create a J/E - debit A/R and credit Customer Advance.  That will reconcile A/R and zero out Customer Advance.

If the bank balance is still off, then there are other issues. 

I thought of that too. But the negative AR was applied the next year when service is rendered.  So that leaves Customer Advance being negative balance.

I forgot to tell you, those two transactions are not the same transaction details.

Yeah I need to reverse it in this current period now. But on the payment received part, the customer did pay the client with 2 checks. The client sent me a pdf copy of those, but when I asked about where did it deposited, he still have to look for it. I don't know how to say this to client. 

Wow, a really big thanks to you. Now I can be at ease I have found the answer. Thank you for involving you time working on my problem. 

Hello Rainflurry,

I have reviewed the solution you’ve shared and it's correct and accurate. Thank you for sharing your inputs to help address the issue.

We love to see members supporting one another! Have a great day.