First run a data integrity check on the GL and let us know what it says.

We did the integrity check and it returned no errors.  We did *not* run it with the 'fix minor errors' option, however as I was unable to do a backup at that time.  I can rerun it with that checked if that is the best next step.

If it did not report any errors then the fix will do nothing.

Ok back to the original error - are you sure? The data integrity check will do an accounting check and it will report if there are such differences as you say.

Was there not and entry done in the adjustment period or the closing period?

Check to see if the prepaid expenses account was inadvertently setup incorrectly in your chart of accounts. If could be a balance sheet account setup as an income statement account. Review your chart of accounts for that account number.

I checked the accounts in question after Etienne posted about adjustment and closing period.  Found a CLOSING entry in the prepaid expenses account, which is set up as a balance sheet account.  Sent the customer an EM asking about that.  While I don't yet have a solution, it appears I have a cause.  

Thanks to both Etienne and Fay.  More to come later, I 'm sure.

The user came back and said she doesn't know anything about his account having been changed at any point from inc stmt to bal sheet.  But we need to resolve the disconnected data problem.  What, if any, problems do we cause if we do a J/E to "correct" the two accounts?

No problems.  

Fix it.  

Move on.

An easy way to confirm if they did have it as an Income Statement account is to review the posting journal for the closing entries when they ran create new year. If it was an Income Statement account you will see the closing entry. Always best to identify the cause of a problem than to just do a fix.

My experience is caused by:

1. Account is set up as balance sheet

2. Year end is done

3. Account changed to income/expense

4. Prior year entry to that account is done.

5. New closing entry is automatic, skewing RE and that account.