posting cost of goods paid for in 2023, put the amounts in 2022 ., No inventory involved . Cash basis
Make adjusting entries to 2021 books, because Cost of Goods Sold was not paid for until 2022. Profit and Loss is incorrect because of this. Do you do a journal entry in 2021 charging COG AND crediting Retained Earnings?
There is some confusion in your question. COGS is not correlated with when a payment is made and you don't pay for COGS, you pay for inventory, overhead, direct labor costs, etc. which is then capitalized and later booked as an expense to COGS - after the product is sold. But that is for accrual basis taxpayers. Have 2021 tax returns been filed? Are 2021 expenses overstated?
There's no adjustment to be made because you're on cash basis. If income was received in Dec. 2021 but not paid for until 2022, the income is recorded in 2021 and the expense is recorded in 2022.
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