USA How to void a stale-dated check from a prior accounting period?


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How is a stale-dated check handled when it comes from a prior accounting period?

For example: Payment sent to a vendor for office supplies where the original transaction involved the following accounts:
Debited Office Supplies Expense
Credited Cash Account

I think it is not correct to "void" the check because financials/books have been closed for that accounting period. Rather, process a "reversal"-type transaction by depositing the check, which involves the following accounts:
Debit Cash Account
Credit Office Supplies Expense

Then, when doing the bank rec, reconcile the outstanding payment against the newly created "reversal"-type transaction.

So, am I correct in saying it is not recommended to "void" a check because doing so will change the prior period financials???

Also, don't some accounting software allow for a "void" transaction where it will do the "reversal" for you behind the scenes??? In other words, it will allow you to "void" a check, but it knows to do a reversal if the check stems from a prior accounting period? Or, are software and ERPs still not that advanced???

Thanks in advance!!! :)
 
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kirby

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When you void a check, you reverse the related entry as of the date voided, not the original issue date. That means the prior period financials are not affected by voiding the check. Even the most basic accounting software will post a reversal entry in connection with voiding the check.
 
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When you void a check, you reverse the related entry as of the date voided, not the original issue date. That means the prior period financials are not affected by voiding the check. Even the most basic accounting software will post a reversal entry in connection with voiding the check.
Thank you!
Now, I would like to shift over to the 1099 tax topic, if that's ok...

If, let's say, the root of all this is a duplicate payment to a vendor, won't the vendor be taxed for the duplicate payment in year 2018? When I void the duplicate check payment in year 2019 how will this affect the 1099 tax in year 2018?
 

kirby

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You need to file an amendment to that 2018 1099
 
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