How to find posting errors before you close your books
Here is a great bookkeeping tip from Karen Schneider article from the December 2006 issue of The General Ledger.
To find posting errors in the income statement accounts on QuickBooks:
1. On REPORTS, click COMPANY & FINANCIAL.
2. Click PROFIT & LOSS STANDARD.
3. Change the date span, if needed, to Jan 01, 2006 thru Dec 31, 2006.
4. To study the report in “Accrual Basis” (for accuracy), click MODIFY REPORT in the top left-hand corner. When the window appears (“Modify Report: Profit & Loss”), look under the 2nd section, “Report Basis,” and click ACCRUAL, then OK. The upper left corner of report will confirm “Accrual Basis” reporting, the current date and the time created.
5. Double-click the TOTAL INCOME figure and examine entries for errors. To view an original form, double-click the particular transaction.
6. Use the Esc key (or red X on form) to close a detail window and return to the P&L report you created.
7. Scroll to the bottom of P&L and look directly above “Net Ordinary Income” and double-click the TOTAL EXPENSE figure.
8. If a transaction is posted to the wrong account, double click anywhere on it and, when the original form opens, post it to the right account. Save and close.
To find posting errors in “Other Income” on QuickBooks, follow the same procedure.
To find posting errors in balance sheet accounts on QuickBooks:
1. Reconcile the final bank statement. Reconcile liabilities such as business and car loans, credit cards, lines of credit, etc., against available statements. Tip: Attach copies of bank or other liability statements to the balance sheet as proof of accuracy.
2. Click the drop-down menu REPORTS.
3. Click COMPANY & FINANCIAL.
4. Click BALANCE SHEET STANDARD.
5. Correct the date, if needed, to 12/31/06 (a balance sheet has only one date—the “as of” date—unlike the P&L’s beginning and ending dates).
6. To view the report in “Accrual Basis,” follow the directions above using “For the income statement” in step 4