Cash basis financial reports should not display Accounts Receivable (A/R) or Accounts Payable (A/P) balances. However, QuickBooks is a bookkeeping program and must balance, so for accrual-based business that reports on cash basis, QuickBooks will display AR and AP.

This article provides steps to take when A/R or A/P balances show on your Cash Basis Balance Sheet (CBBS) report and you need to remove them. Specifically, it describes:

  • How to create a General Journal Entry to remove AR and or AP balances from a cash basis balance sheet on the last day of a reporting period.
  • How to reverse the General Journal Entry on the first day of the next reporting period.