AMy client’s former accountant said her Simply Accounting file was compromised, so all I had to go on for historical data was the balance sheet for the last year end, generated not long after the fiscal year end (May 31/22). Once I entered the historical info on hand, I closed the “enter history” option.
I'm almost finished entering the current fiscal year's data and stumbled on a copy of the GST return (annual) filed for last fiscal. I realized that the balance sheet entry to May 2022 for GST was incorrectly stated on the financials. I've looked back and the numbers remitted to CRA were correct. Odds are that the prior accountant made adjustments after that report but without her Simply file, I had nothing else to go initially when setting up the company file in Sage.
What can I do to fix this? I can't enter the correction as last year even though I know that's where the adjustment really belongs. For the moment, I did a journal entry to correct the starting balance to what the GST return was filed as to get that off the balance sheet, and I offset the difference to an expense account that I labeled as "GST historical correction". Is this the right process? This will impact the income statement instead of the balance sheet and I don't want that either because it’s incorrect regardless. I want to make it go away altogether.
Any suggestions are very welcome.
