cancel cheque from old year

Question

in March (previous fiscal year) we posted an invoice and cheque; it did not clear in March and so is carried over into the new fiscal year. in the meantime we have reconciled the March bank, closed the 2015 year and opened 2016. Now in April we are informed that the cheque needs to be cancelled. since we are crossing over fiscal years, how do we cancel a cheque written last year after the bank was reconciled, in this year's books? the funds in the bank carry over into the new fiscal year, but the expense account zeros out when the new year opens. what is the fix to balance both years with respect to this event?

Smith and Co · Accepted Answer

You would go back into your A/P module - select the Payment module, select the vendor the chq was written to, select the icon that says 'Include fully paid invoices/prepayments' (yellow sheet with red lines), find the invoice the chq paid and select that invoice by entering amount as a negative amount. Select today's date for chq date and enter chq nbr as Cancel(the original Chq Nbr) and post. 
 Then you would go back into the A/P module, select Purchase Invoice, enter the vendor name, enter as invoice No Cancel (original invoice nbr), use today's date, enter the amount as negative amount and use same account nbr that was used last year. Then post. 
 You can now go back into the Payment module and clear the Cancel Invoice and the Cancel Chq amount which will result in a 0.00 chq amount and post. This ensure that the cancelled invoice and the reversed chq does not appear when pulling up the detailed vender aged listing. 
 You have declared the expense last year which affected the Retained Earnings so this year you will be crediting that same expense account and that will reverse the effect on Retained Earnings for this year.

Sage 50 Canada

cancel cheque from old year

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