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Posted by foldem on February 14, 2007, 4:15 am
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>> As a new QB user, I entered 2005 and 2006 information into QB in
>> December 2006. Prior to this I used Excel, as we are a very small
>> business.
>>
>> I paid a credit card bill in January 2006 by using the Write Checks
>> since I pay the credit card in full. When I paid it, I used the SPLIT
>> feature and posted the expenses to various CofA. Some of the expenses
>> were from 2005 and had already been included in 2005 taxes. Those
>> 2005 expenses now, of course, are included in the 2006 tax year, since
>> that is when I wrote the check.
>>
>> After just meeting with our CPA, he said I need to change the 2005
>> expenses to post in 2005 (since they were already included in 2005
>> taxes) using a General Journal Entry. How do I do that? I have tried
>> researching it, but I don't get it. How do I change a 2006 entry to
>> become a 2005 entry?
>>
>> I will change my QB practice for 2007 and set up Credit Cards like
>> Bank Accounts so this won't happen in the future! Thanks in advance
>> for your help.
>
>You can't since it is included in a 2006 check.
>
>What is normally done under these circumstances is to accrue the expenses in
>2005 for those expenses incurred in 2006. Set up a G/L account, a current
>liability, called Accrued Expenses. Then do a journal entry that Debits the
>appropriate expense accounts and credits Accrued expenses. Reverse the
>journal entry in January 2006 to line up with the check written so that
>these net to zero.
One entry will do - do the 2005 entry on 12/31/05, then check the box
that says "reversing entry". It'll enter automatically in 2006.
Best,
Peter
--
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