Year End Adjusting Entries

Question

I am in desperate need of help. I have been working to try and solve this problem for what seem forever. And I am not farther ahead. I an trying to do year end adjusting entries that were given to me by my accountant. But the adjusting entries are for the Accounts Payable and Receivables and I cannot post directly to these accounts. And every time I think I have it right it goes horrible wrong. I have picked this account up after someone else. And I think here were mistakes made before I took over. 
 My accountant wants me to make changes in the Accounts Receivable Module...to move funds from Accounts Receivable 1200 (CR) for 31000.00 into Operating Revenue 4003 (DR) 31000.00. How do I do this? 
 Also there are some adjusting entries from Purchase Prepayments and Accounts Payable that need to be adjusted. 
 If some one could please shed some light on this I would be very grateful. 
 Many Thanks Amanda

Smith and Co · Accepted Answer

Changes that are made to A/R 1200 and A/P 2??? occurs when you are posting sales/purchase invoices and receipts/payments. That is really the only way to change the A/R1200 and A/P 2??? balance. So your accountant wants you to credit A/R 1200 (which reduces the amount owed to the company by the customers) and debit a revenue acct 4003 for same amount (which decrease your total sales). To do so you will need to ask your accountant for a list of customers and amounts that makes up this 31000.00 and then select each customer to create an invoice for a specific amount related to that customer, enter that amount as a negative number, coding it to 4003. 
 If it's the other way around - debit A/R1200 and credit 4300 - then the amount entered to each affected customer would be a positive amount. 
 The same goes for the purchase prepayments.

Keith L · Answer

Hi Ava56,

If any suggestions provided in this thread is able to help you resolving your issue, would you please click the 'Yes' button to the question - 'Did this answer the question?' The thread will be marked as answered, which will benefit other users who have the same issue. Thanks a lot.

RandyW · Answer

Sometimes these adjustments to the trial balance are for 'presentation purposes', in the accountant's software and do not need to be entered in Sage 50. 
 The purchase prepayments also may be netted off / combined with other amounts owing to the same vendor strictly for presentation purposes, and may not need to change your records to match. 
 As Smithco says, you need to know what's up.

Smith and Co · Answer

I am a little confused since you said ***The adjusting entries that I was make was supposed to close out this balance but it didn't it put it into Accounts Receivable*** and also you are talking about Accounts Payable. I am going to assume you meant Accounts Payable. You are a bit vague on the details and without knowing what your accountant is asking you to do I can only guess at what it is. 
 Most likely that was already entered thru Accounts Payable and coded to the prepaid account 1300. 
 For example Property Taxes would be posted thru purchase module and coded to prepaid account 1300 because this amount that was paid is for the whole year. Then every month 1/12 of this amount will be expensed to property tax expense thru journal entry by crediting prepaid expense and debiting property tax expense. 
 You will need to find out what makes up this balance in the Prepaid Expense 1300 in order to know where to expense it and then do a journal entry to credit prepaid expense 1300 and debit a 5000 expense account. There are many items that can go into prepaid expense such as vehicle insurance which was paid for the whole year, property taxes, annual memberships and subcriptions, liability and property insurances, etc etc. 
 If you are not familiar with this then it might be a good idea to take up an online course or an evening course on basic bookkeeping - that will likely help with understanding what the accountant is asking you to do.

Sage 50 Canada

Year End Adjusting Entries

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