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Clearing up Old Liability Accounts  

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(@darla-2)
Joined: 6 months ago
Posts: 1
17/03/2020 1:01 am  

Hello,

I have a new client who's liability accounts are so messed up to the point that they need to be cleared out as the balances are old going back to 2012 to 2017. What AJE accounts should be used to clear up these accounts?


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 Casey Stokes
(@Casey Stokes)
Joined: 4 months ago
Posts: 10
17/03/2020 1:17 pm  

There is truly not enough info to give a solid answer.  Which Liability accounts, have all cash and CC accounts been reconciled, do they have a DR balance or a CR balance, have all tax returns been completed?  In some cases, you can get the last trial balance from the CPA, who completed the last tax return.  Make your TB match theirs, then go through the current year, making sure all transactions are correctly posted to the account, and make any adjustments to a Prior Period Adjustments account.  If the accounts have a DR balance, then search for payments that were posted to expenses, instead of Liab.  Review the item list and payroll item list, to be sure they are set up correctly to post to the correct accounts.  If you can be more specific about what is "messed" up, you may have a better chance of getting helpful info.


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