How do I correct vendor A/P balances after the closing date?
I have been collecting statements from my client's vendors trying to correct their A/P balances for a while now. So far, I've seen that they used to operate under the accrual method but have since switched to cash, and the last bookkeeper left shortly after the switch without a replacement before the last closing so the A/P balance discrepancy stretches over more than one period that has already been reported on.
I'd like to think that the simple answer is to make a journal entry debiting A/P and crediting the Expense account to which it should have applied, but I have a suspicion that crediting Reconciliation Discrepancies might be right instead. Maybe a vendor credit would serve the same purpose? I know I can't add any transactions to the prior periods, but what actions can I take in the current period to correct this?