May 2024 – Adjusting Journal Entries
ADJUSTING JOURNAL ENTRIES
OVERVIEW
As the March and April tax filing deadlines are now completed, business owners will now be finalizing their bookkeeping for 2023. Part of finalizing 2023 bookkeeping should include posting the adjusting journal entries we provided with the business tax returns.
In this newsletter, we provide the steps needed to post the tax preparation adjusting journal entries and ensure your 2023 bookkeeping file is finalized.
POSTING 2023 ADJUSTING JOURNAL ENTRIES
If we prepared your partnership, S-corporation, C-corporation, or trust, we provided you with our tax preparation journal entries and adjusted trial balance as an upload to the portal.
After the adjusting entries and adjusted trial balance are uploaded to the portal, please provide them to your bookkeeper as soon as possible.
If you are the bookkeeper for your business, please follow the steps outlined below to post the adjusting journal entries for 2023:
– Download the adjusting journal entries PDF file from the portal.
– Open your bookkeeping software and navigate to the Adjusting Journal Entries screen.
– QuickBooks Online Instructions
– QuickBooks Desktop Instructions
– Following the adjusting journal entries PDF, post each entry one at a time following the numbering provided.
– The date is 12/31/23 for each entry.
– Be sure to enter debit balances and credit balances to match the debits and credits in the adjusting journal entries we provided.
– If using QuickBooks Online, check the box for “adjusting journal entry” in each entry.
– For any adjustments to accounts payable or accounts receivable, please see our notes in the adjusting entry memos that indicate which vendors/customers to allocate the entry to.
– If you encounter an account we used that is not in your bookkeeping file yet, please either add the account using the directions provided in the memo, or give us a call so we can assist you in creating the new account.
– After you finish adding all of your accounts, amounts, and the memo in each line of the entry, make sure that your debits equal your credits.
– Double check that the posting date is 12/31/2023.
– If using QuickBooks Online, double check that the “adjusting journal entry” box is checked.
– Save your entry and start the next entry, “save and new”.
REVIEW YOUR WORK
After you post the entries, it is time to check that they are all flowing to the financial statements correctly.
– To do this, run a Profit & Loss report out of your bookkeeping software as of 12/31/2023.
– QuickBooks Online Instructions
– QuickBooks Desktop Instructions
– When the report populates, make sure the report is as of 12/31/2023.
– Compare net income per your Profit & Loss report against net income per the adjusted trial balance we provided on the portal with the adjusting journal entries.
– Net income should match across the two reports.
– If net income does not match, review each income and expense account balance and match the account balances across to the adjusted trial balance we provided. Find the account balances that do not match and either determine if there was an error in your adjusting journal entries process or give us a call so we can help troubleshoot.
– Next, run a Balance Sheet report as of 12/31/2023 using the instructions linked below.
– QuickBooks Online Instructions
– QuickBooks Desktop Instructions
– Compare and match all account balances on your Balance Sheet against the adjusted trial balance we provided.
– The goal is that all accounts on your Profit & Loss statement and Balance Sheet match to the balances on the adjusted trial balance we provided, and net income matches between the reports as well.
CLOSE THE BOOKS
Once you have completed all of the steps to review your work, it is time to close the books for 2023 so that no more changes can be made.
– QuickBooks Online Instructions
– QuickBooks Desktop Instructions
If you have any questions or encounter difficulties during this process, please don’t hesitate to reach out to us and we will be happy to assist you!