QuickBooks Period End Tasks: The Accounting Side – Chpt.3

Posted by on Aug 24, 2011 in Fiscal Period End Tasks | 0 comments

This brings us to the final chapter on QuickBooks period end tasks. What will be covered here is Long Term Debts, Audit Trail and Setting the Closing Date.

Long Term Liabilities – If this type of liability was financed by a lending or banking institution, then at the end of each year, a statement from the lender should be reconciled to the Balance Sheet amount. Here one has to be cognizant of the principal and interest portions paid on these amounts.

If these amounts were not broken out at the time of each payment, then a year-end adjustment needs to be recorded to recognize the correct amounts, and the corresponding principal balance outstanding. Most lending institutions will provide principal and interests amounts paid on the liabilities for the fiscal year in question.

The interest portion of the Term Loan – if used for business purposes, would qualify as an expense for this sample company. Likewise for the Trailer Loan.

Personal loans and the interest portions would not qualify as a deductible expense – unless one can prove that it was used for business purposes. Make sure you have adequate documentation if it is a personal loan and its intended use.

Audit Trail – depending on whether your T1 or T2 tax return is reviewed, audited or not reviewed, will determine on the use of QuickBooks Audit Trail report by the external accountant. The report is found on the Menu Bar/Reports/ Accountant & Taxes/Audit Trail.

This is a very long report to print, so if you’re interested in what type of entries make up the information, then maybe just print one month only.

Early QuickBooks versions actually allowed a person to turn on and off the gathering of the data that makes up this report. Now is is turned on by default and left that way.

What this report will show you is every transaction that has ever been entered in the QuickBooks company file. Not only that, but if you change, delete or void a transaction, it will appear in the report in bold print.

If you look closely at the report displayed up above, you will see that Invoice 17 and Sales Order 2 have been Deleted. Below in the State column is the “Prior” information that was recorded along with the amount.

This allows the accountant to have a clear picture if puzzling items disappear, that were pertinent in previous period financial statements or reports. I would suggest that one never delete any transaction but instead VOID it, if you are attempting to make a change or cancel it.

Closing Date –  since I have written an article previously on this topic, I will just link you to that.

This ends the three chapter segment on QuickBooks Period End Tasks. I hope this has helped you in understanding what is required and how to perform them.

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