Tracy Resch said:

I assume it is because it is linked to other payroll accounts but I am not sure how to now reverse it.

Normally you would have to pay out that vacation pay, or post an adjustment through the payroll module. 

Ask your accountant whether the adjustment has to be posted in your books and if there is a reversing entry in the following period, and to which employees it applies, and whether it was only for financial statement presentation and doesn't need to be entered at all.

Thanks for the reply. The vacation pay was entered in error and covers a number of employees over the year. My accountant has given me his TB which shows the adjustment and a subsequent 0.00 balance in the account. The adjustment dr vacation payable and cr Wages and Salaries.  As far as I know, there is no reversing entry in the following period. Would I still be able to make the adjustment trough the payroll module and, if so, how would I do that? 

The mechanics of it are to record a pay cheque to the affected employee with negative pay (i.e. Retro pay of -1000) to balance off positive vacation pay (i.e. +1000)

Check your journal entry with control-J before posting.

When I do that it, it dr my bank account. Sorry, I’m obviously missing something. 

Light bulb moment. Got it. Thanks so much!