Before close of the fiscal year entered transactions in payables and run checks for a new fiscal year and posted to the wrong year. How do I correct this error?
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If you have already closed the subledgers for the year that was posted in error, the only option that I can offer is to make a reversing general ledger entry to reverse the effect of the invoices and checks. This should allow your general ledger balances to be correct for each year (realize the g/l will not tie to the subledgers for that given fiscal month/year where the amounts were posted to the subledger using the wrong fiscal year, but it will self correct once the reversing g/l entry hits).
If you have not closed the subledgers, then you should be able to void the invoices input into the wrong fiscal year which will correct the general ledger account balances.
For the checks though, my assumption is that the checks have been mailed. If that is the case, your best option in my opinion is to do a reversing general ledger entry to increase cash and increase a/p (or whatever account was the offset to the checks/cash) into the fiscal year posted wrong. When the g/l entry reverses in the current year, the subledger will balance with the g/l.
Hope this helps.
Best regards,
Dale
I like Dale's option #3 the best. Option #1 isn't great because as Dale notes, your GL will be out of balance with the AP and banking subledgers for the period into which the invoices/payments were posted. Option #2 would require voiding the payments before you can void the invoices so if the checks have been mailed, voiding the payments could be messy.
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