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


S

Stephen Porter

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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?

!-!

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.
 
G

Golden California Girls

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.
 
A

Allan Martin

Golden California Girls said:
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.
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.
 
G

Golden California Girls

Allan said:
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.
Depends on why they have to void the check or course. Perhaps the payment
wasn't owed in the first place?
 
S

Stephen Porter

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... ;-).

stp
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.
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*** Encrypt your Internet usage with a free VPN account from http://www.SecureIX.com ***
 
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S

Stephen Porter

Depends on why they have to void the check or course. Perhaps the payment
wasn't owed in the first place?
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.

stp
*** Free account sponsored by SecureIX.com ***
*** Encrypt your Internet usage with a free VPN account from http://www.SecureIX.com ***
 
S

Steven Latus

Stephen said:
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.

stp
*** Free account sponsored by SecureIX.com ***
*** Encrypt your Internet usage with a free VPN account from http://www.SecureIX.com ***
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.

Steve
 
M

Mike Block - Tax Cut C.P.A.

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!
http://www.blocktax.com/
http://www.quickbooks-add-ons.com/
 
S

Stephen Porter

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.


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.

Steve
*** Free account sponsored by SecureIX.com ***
*** Encrypt your Internet usage with a free VPN account from http://www.SecureIX.com ***
 
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A

Allan Martin

Stephen Porter said:
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.
The One-Write program was marketed years before Quicken. When Quicken
showed up it blew them out of the water.
 

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