Cash basis financial reports are not supposed to show the Accounts Receivable (A/R) or Accounts Payable (A/P) balances. However, QuickBooks is accounting software and for the accrual-based business in which the reports are made on a cash basis, AR and AP balances will be shown by QuickBooks.

This article will provide you the steps that you need to perform if A/R or AP balances showing on your Cash Basis Balance Sheet (CBBS) report and you have to remove all of them. It describes the following things:

  • The way to create General Journal Entry to delete AR and AP balance from a CBBS sheet on the last day of a reporting period.
  • How you can reverse the General Journal Entry on the first day of the upcoming reporting period.

Remove Accounts Receivable

  • Make a journal entry to delete A/R from the cash basis report on the last day.
    • From the main menu of QuickBooks, go to Company > Make General Journal Entries.
    • Provide the Date and the Entry No in the respective field.
    • Choose the Account section from the first line and then click on an appropriate offset account. Make sure that the offset account is an account other than Accounts Receivable and it will usually be an Income or Asset account. We recommend you to consult with your accountant if you not sure about which account that you should select.
    • Enter the amount in the Debit
    • Select Accounts Receivable from the second line of Account
    • Provide the amount in the Credit
    • Provide an AR Adjustment Name in the Name
    • Click on Save. IMPORTANT: This is important if you use A/R or A/P accounts.
  • Make a reversing entry on then first day of the upcoming reporting period.
    • From the main menu of QuickBooks, go to Company > Make General Journal Entries.
    • Locate the journal entry you created in previous step.
    • Modify the date of first day of upcoming quarter. If you are asked to save changes then click on No.
    • Click on Reverse on the top of the Journal Entry window.
    • Click on Save & Close.

Remove Accounts Payable

  • Make a journal entry to delete the A/P from the CBBS on the end day of a reporting period.
    • From the main menu of QuickBooks, go to Company > Make General Journal Entries.
    • Provide the Date and the Entry No in the respective field.
    • Choose the Account section from the first line and then click on an appropriate offset account. Make sure that the offset account is an account other than Accounts Receivable and it will usually be an Income or Asset account. We recommend you to consult with your accountant if you not sure about which account that you should select.
    • Enter the amount in the Credit
    • Select Accounts Payable from the second line of Account
    • Provide the amount in the Debit
    • Provide an AP Adjustment Name in the Name
    • Click on Save. IMPORTANT: This is important if you use A/R or A/P accounts.
  • Make a reversing entry on the first day of the upcoming reporting period.
    • From the main menu of QuickBooks, go to Company > Make General Journal Entries.
    • Locate the journal entry you created in the previous step.
    • Modify the date of the first day of the upcoming quarter. If you are asked to save changes then click on No.
    • Click on Reverse on the top of the Journal Entry window.
    • Click on Save & Close.

You need to add a name whenever the A/R or A/P account is being used in the journal entries or transactions primarily to make it able to generate A/R and A/P reports appropriately and make sure that the sum of these transactions match those main A/R and A/P accounts.

Technical Support For QuickBooks

Hopefully, you find this article helpful and you are now able to resolve AR or AP on the cash basis balance sheet with journal entries. The solutions provided in this article are not covered by CCP. If you don’t have an active support plan then make sure that you provide a proper roadmap before starting the troubleshooting process. You can contact us at our toll-free QuickBooks Support Phone Number +1888-396-0208 to get an instant solution for these issues.

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Resolve AR Or AP On The CBBS With Journal Entries: [Complete Guide]

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