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How can i delete or get rid of the balance of lets say a chequing account that no longer exists ?
also lets say im starting books for a client and their opening balance of a house account (cps)and they have the account at -45000.00 when it should be 0.00. How can i correct this and not make a mess?
thanks .
Good morning KKH!
This is a bit difficult to answer without a little more information, unfortunately.
I assume that the set of books in question have been in use for multiple years? Or is this the first year on the data file?
Also, it is important to know if the customer is a corporation, partnership, or sole proprietor, as that changes the dynamics of the entries that need to be made.
If the customer is a corporation, the answer is to not change anything, and allow the accountant to adjust the balances as necessary. Those adjusting journal entries then need to be made to reconcile the user's financial statements to those of the accountant.
If, however, the user is a sole proprietor or a partnership, the adjustment is a little more straight forward. You can go into the transaction entry screen and do what we call a zero-dollar withdrawal. I'm working under the assumption that the House Account you mentioned is set up as an asset.
Leave the transaction type a Withdrawal, and enter your date, reference, and description. Leave the Total as 0.00.
The first line would be an A+ and you would select the house account. Set the amount to 45,000. Create a second line.
The second line can go one of two ways, depending on the preference of the customer, and the person doing the books. You can either use type EQ and account 3998 Retained Earnings to balance the transaction. Or, you can use type PD/PA and balance off to a personal account. Either way is going to get that opening balance to the right amount.
You can apply this entry to almost any type of account - as long as you are simply getting setup for a new year. I wouldn't make it a habit to do this sort of procedure year over year, however. Care should be taken throughout the year to ensure that all balances are reconciled at the end of the year.
I hope this helps!