The Cash Basis Balance Sheet (CBBS) should not show Accounts Receivable (A/R) or Accounts Payable (A/P) balances because these accounts track open (unpaid) invoices and unpaid bills. Many companies use A/R and A/P accounts and report on the cash basis. QuickBooks was not designed to be used in this way and reporting anomalies result. The only way to assure that cash basis reports have no anomalies is to use only transactions that do not affect A/R or A/P.

For the discussions below, please be aware that every QuickBooks transaction has one source account and one or more target accounts. You can view the posted accounts in any transaction by running the Transaction Journal report. The first line of the Transaction Journal Report shows the source account. All subsequent lines in the transaction show the target accounts.

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INF12397