QuickBooks Period End Tasks: The Accounting Side – Chpt.2

Posted by on Aug 22, 2011 in Fiscal Period End Tasks | 0 comments

Continuing on from Chapter One and the QuickBooks Period End Tasks, I will now look at the Prepaid Expenses and Fixed Assets.

Prepaid Expenses – this account needs to be reviewed at the end of each fiscal year, due to the fact that these expenses are ever evolving. You may find items like prepaid rent, insurance and deposits, just to name a few, that if not expensed throughout the fiscal year – now need to be.

This may be as simple as amortizing these expenses or reclassing them. I have seen far too many amounts left unaccounted for in prepaid expenses, and the longer they remain there, the more difficult it becomes too trace back the original entry.

Fixed Assets – first of all you need to make sure that the cost of the asset is accurate, since the amortization is based on that number. Next step involves a bit of homework unless you know the capital cost allowance (CCA) and classes of depreciable property. If you go to the CRA site you can find the various classes and percentages used for amortization.

Take  the Computer Equipment used in this example. The percentage used in Class 45 equipment is 45%, so the cost (7,117.20) was multiplied by 45% which equals 3,202.49,  and then was divided by 12 (months) to arrive at 266.71 (rounded up), as displayed on the right.

The 266.71 was then entered as a journal entry on a monthly basis to record the accumulated amortization. If you did not do this for each month, then the journal entry would be recorded on the last day of the month of the fiscal year for the 3,202.49 total.

The above would be repeated for each fixed asset using the various classes and percentages that they fall into.


Accounts Payable – you will need to print out  an A/P Aging summary dated for the end of the fiscal year. You will find this by going to Reports/Vendors & Payables and AP Aging Summary.  The Total amount in this report should reconcile to your Accounts Payable amount on your Balance Sheet.

You also need to review any payables that are over 90 days to see if these are still owed.  As you can see in this example, this company does not have any payables over 60 days which means they are in a healthy financial state.

Credit Cards – this Balance Sheet amount should reconcile to the ending balance from your credit card statement. Hopefully you have reconciled the QuickBooks credit card and if so, and it reconciles to your Balance Sheet amount, then include a copy of the statement in the Working Papers folder.

Accrued Liabilities –  These can be made up of expenses that have not been billed such as the external accountants fees or as the example displayed on the left, the employee’s Accrued Vacation Pay. The accountant’s fee would be an estimate based on last years bill entered via a journal entry.

The Vacation Pay always needs to be reconciled to the Vacation Summary report. This report is found by going to the Menu Bar/Reports/Employees & Payroll and choosing Vacation Summary as at the end of the fiscal year.

This can be one of the most difficult tasks if the Vacation Pay has not been kept up to date.

GST/HST Payable – since most Canadian companies file on a quarterly basis, you need to print out the Sales Tax report that matches the fourth quarter of your fiscal year. To find this report go to Menu Bar/Reports/Sales Tax/View Prior Sales Tax Return. This amount should reconcile to the Balance Sheet GST/HST Payable figure.

If you have not been using the QuickBooks File Sales Tax feature (and why not when I showed you how?) , then you will not be able to use the report. In that case if you filled out a GST/HST remittances form when you filed it, make a copy and include it in your Working Papers folder.

Next up – Long Term Debt.

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