What is the best way to fix and reclassify an old bill paid transaction from a bank account to an expense without messing up the prior balance sheet?

Thanks for posting a question here in the Community, @Chrissy3.

I'm here to share some insights about reclassifying the account type of this paid bill transaction in QuickBooks Online (QBO).

To begin with, reclassifying this paid bill transaction from a bank to an expense account won't affect your Balance Sheet report as long as its amount and dates remain the same. 

Meanwhile, you'll want to customize your reports in QuickBooks Online. This way, you're able to control how your reports look like and what information to include: How to customize reports in QBO?. 

Leave a comment below if you have more questions about recording your transactions in QBO. I'll be here in the Community to help you. Stay safe and have a great day, @Chrissy3.

It's not for QB Desktop. It's for QB Online

I am the new bookkeeper for this client.

And yes this will change my balance sheet because it is from an asset account to an expense account.

Yes it will change the Balance Sheet as it is from an asset account to an expense account.

I'm the new bookkeeper to this client and I'm trying to fix their books from previous bookkeeper mistakes.

Hello there, @Chrissy3.

At this time, generating an expense to your asset is unavailable in QuickBooks.

In QuickBooks, purchasing an asset should be tagged to an assent account while an expense is an outflow of cash in your books. 

What should be done here is to simply delete the expense and record it correctly under Assets. However, since the amount already cleared the bank, you can resort to an accounting professional to get the best accounting advice on how to handle this type of situation.

You can also use journal entry transactions to make the adjustment. Here's how:

1.  Go to the + New.
2. Click Journal entry.
3. Enter the accounts you want to use. If you're unsure, seek an accountant for help.
4. Fill out the fields to create your journal entry.
5. Press Save & Close when done.

For additional guidance on how to record journal entries in QuickBooks Online, see this article: Create a journal entry in QuickBooks Online.

Keep in touch if you have any other concerns or questions. I’ll get back to answer them for you. Enjoy the rest of the day.

Thank you, but I figured it out.

I just made a journal entry from the bank account to the expense account dated on the first day of the new accounting period, not on the period of that transaction so it won't affect the Balance sheet, but still would be able to reconcile my bank accounts.