Adjusting previous years A/P
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How do I adjust an accounts payable balance to $0 from a previous year because I know that the bill has been paid and we no longer owe the money? I can not just delete the original bill from 2007 because it would effect the financials, right?
Comment
One more issue are you reporting cash or accural basis for tax purposes?
Comment
It is cash basis and the check was written just not applied to accounts payable
Answer
If you mean that the check debited an account other than accounts payable, the financials wil change when you make the correction. If for some reason you do not wish to restate a prior period, the problem can be corrected in the current period with a journal entry.
If you mean that the check was debited to accounts payable, but not applied to an invoice, you can go into the pay bills screen, select the invoice and select the "set credits" option. This will allow you to apply the payment to an invoice. This should not change the financials, just clean up the A/P aging report.
Comment
Any adjustment that you make will affect the financials. How was the bill originally paid? Was it entered twice. Are the expenses for the prior year overstated?
Was a check written and just not applied to the invoice?
In other words, what are the circumstances that made the payable stay open?