USA Previous year adjustment

[ADDISION]

I am new to a company. They have an amount listed as a payroll liability (Fed witholding payable) on the balance sheet that has been on the books for a couple years and no one has ever adjusted it. The accountant obviously didn't notice it either. I searched for the transaction and it appears to be a transposition error two years ago (was suppose to be account 2401 and instead was posted to 2140 account).

How do I adjust this off of the balance sheet in the current year?

 

[Drmdcpa]

What happened in the other account? Is it correct? Perhaps just reversing the error will work. Looks like they are both liability accounts. If the other was adjusted, reversing will not work.

At year end I am forever adjusting payroll liabilities for client books. The offset is payroll tax expense.

Since this is a prior year issue, it may have been corrected on the tax return. Does the balance sheet agree with the return? It should.