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Account will not balance
OK, so the difference will
not go to zero. What next? That’s
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 can’t 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 owner’s 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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