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Chapter 5

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Account will not balance

OK, so the difference will not go to zero. What next?  Thats a good question.  There are a number of parameters involved.  You could cancel the reconciliation.  The cleared checks on the transactions are saved. So the question is answered with several questions:

Can you continue the QuickBooks session, and work through the reconciliation?

Will you have to close QuickBooks, and come back to the reconciliation later?

Do you need to submit reconciliation reports to others?

If you are going to stay at it, the next step is to go back to the register, and print it out, for the last two months. Then, do a detailed, line-by-line comparison with the bank statements.  (You may want to make a copy of the statement, and mark all over it.)

If you have to close QuickBooks, and you do not need to submit reconciliation reports, an adjustment (below) is probably the thing.  At your convenience, compare with the statements.  With the comparison, the adjustment almost certainly will change, and might just go away. With the discrepancies cleared up, another reconciliation will be needed.  The account will be clean, but if you print reports, there would be two of them.

If you do submit reconciliation reports, and must close the program, you have to abandon (actually, suspend) the reconciliation attempt.  The comparison with the statement will be needed.

As long as the QuickBooks displays and print-outs are consistent, they are almost certainly right, and correction is a matter of reviewing your records.  What will not help is a call to Tech Support.  They cant see your bank statement or your check register.  The person to contact is an accountant, but be prepared for the response.  Accountants have been known to express disapproval at the way some business people keep records.

Adjustment may be necessary, or the optimal way out.  It may be part of the plan, if your previous banking was not precise.

If the Difference at the bottom is not zero, and you click OK, you get this screen.  QuickBooks offers to adjust the bank account, and this may be necessary.  The bank account will go up or down, and so must another account.  Which other account is involved is a matter of accounting discretion. 

In the first reconciliation, the adjustment is probably a matter of correctly stating your beginning position, and should affect an owners equity account.  In later reconciliations, it may be an income or expense matter. This would affect income tax returns, and needs the counsel of an accountant or enrolled agent.

The positive side of adjustments: they usually are a startup change, and should not be necessary more than once.  After the account is once corrected, as long as all entries are correct, it will stay in balance.

First reconciliation may show a beginning balance of zero.  This means the opening balance was not marked as reconciled. It may be merely left, unless reconciliations must be presented to an outside agency.  In this rare case, the opening balance may be marked as reconciled, in the register.  Just click once or twice in the Cleared ( b ) column, leaving it with  b, indicating reconciliation.

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Last modified: May 21, 2004