How to void a check from a previous (closed) period w/o affecting FS

Discussion in 'Quickbooks' started by Stephen Porter, Mar 10, 2006.

  1. Hello,

    I'm just trying out a new newsreader...hope this works.

    Can anyone give me a pointer on how to go about "voiding" a check from a
    previous period in a way so that I can get it out of the reconciliation
    report without affecting the the previous period's reporting?

    I know I can do a journal entry in a current period to reverse the
    transaction, but that will leave the check forever uncleared.

    TIA for any help.

    Best regards,
    Stephen Porter
    Los Angeles, CA
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    Stephen Porter, Mar 10, 2006
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  2. Stephen Porter

    !-! Guest

    You are on the right track, but stopped thinking too soon.
    Journal entry (or deposit) in the current period, then clear BOTH the
    journal entry AND the check on your next reconciliation.
    !-!, Mar 10, 2006
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  3. That will work, except possibly for the tax man. He hasn't said if the check
    was for a deductible item or if his taxes are based on cash or accrual books.
    If the check is for something that was deducted on a cash basis return, he
    should void the check and file an amended tax return(s). If he is accrual,
    usually the tax agency will accept the change in revenue in the later period of
    the journal entry. The reason the check is voided may play a part in this as
    well and that may set the date the journal entry has to be made which could be a
    different closed period.

    P.S. if it is a $10 check nobody cares, a $1,000,000 check and you better see
    the person who prepares your tax return for advice.
    Golden California Girls, Mar 10, 2006
  4. Stephen Porter

    Allan Martin Guest

    You must be kidding. If the taxpayer is that concerned with doing the
    absolute correct thing then they would forward the amount of the check over
    to their state. Its called the escheat law and most states have it.
    Allan Martin, Mar 10, 2006
  5. Depends on why they have to void the check or course. Perhaps the payment
    wasn't owed in the first place?
    Golden California Girls, Mar 11, 2006
  6. On Fri, 10 Mar 2006 08:40:42 -0500, !-! wrote:

    Thanks...that will work. I often stop thinking too soon...and sometimes I
    keep thinking too long... ;-).

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    Stephen Porter, Mar 12, 2006
  7. I understand that technically the void will have some (in this case minor)
    effect on the previous year's tax return, but not enough to go to the
    trouble of filing an amended return. Reason is that a check just never
    cleared the bank...and was either replaced later or the money wasn't owed
    in the first place. Just a clerical error of some sort. But I'm the
    fastidious bookkeeper type and I want to always keep my QB FS statements in
    alignment with the tax returns.

    Thanks for all the feedback. Great group.

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    Stephen Porter, Mar 12, 2006
  8. Stephen Porter

    Steven Latus Guest

    From what I read, QB 2006 is supposed to automatically do the journal
    entries to correct the books when voiding a check from a prior period so
    that the prior period trial balance will be unchanged and only the
    current period will be adjusted. That, of course, is assuming that the
    amount of the check is immaterial.

    It's still kind of a kludge, but it beats having to do the entries
    yourself (or trusting someone else to do them correctly).

    I used to work with a program in the DOS days (One-Write Plus) that gave
    you a choice of voiding such a check either in the prior period or the
    current period. No journal entries were generated and none were needed.
    If you chose to void it in a prior period, the prior-period trial
    balance would be changed. If you chose the current period (the usually
    desired choice), then the prior period would be untouched and only the
    current period would be adjusted.

    Allowing the void to occur in a prior period (especially in a prior
    closed year) sometimes could and did lead to some interesting moments
    when doing a closing. It usually happened when a bookkeeper chose to
    void in a prior period, either by inattention or by not thinking through
    the consequences.

    Steven Latus, Mar 12, 2006
  9. That's easy.

    Create a dummy deposit in the current period. Offset it to the account the
    old check charged as an expense. Then clear the dummy deposit and the old
    check in the same period. Ideally you should first change the dummy deposit
    and old check to reference each other.

    Mike Block - QuickBooks Tax Cut C.P.A.
    Intuit paid me to make QuickBooks better!
    Mike Block - Tax Cut C.P.A., Mar 12, 2006
  10. I remember One-Write Plus well ;-). Very nice program, actually. But
    Quicken/Quickbooks already had such marketshare I guess they couldn't make
    a dent.

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    Stephen Porter, Mar 19, 2006
  11. Stephen Porter

    Allan Martin Guest

    The One-Write program was marketed years before Quicken. When Quicken
    showed up it blew them out of the water.
    Allan Martin, Mar 19, 2006
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