My accountant would like to know why a Cash Basis Balance Sheet shows an
amount in Accounts Receivable. (and so would I).
Looking through the list, I can't identify any rhyme or reason to the items
I've been doing some searching in Google Groups and have found some answers
to the same question from previous posters. However, the information given
doesn't seem to resolve the issues I'm having.
For example, one transaction included an invoice created 1/5/04 having 3
inventory items. The invoice was paid in cash on 1/7/04. But those three
inventory items appear in the A/R category of a Cash Basis balance sheet for
the year 2004.
The only thing I can see that might be an anomaly is that the assistant who
created the invoice failed to enter a sales price for one of the items and
gave it away for free. So there is a COGS for the item but no paid amount.
The detail report of the A/R category has columns labeled "Original Amount",
which appears to be the sale price from the invoice (as a negative amount);
"Paid Amount" which seems to be the cost of the item; and the "Balance"
which is apparently a running total of the "Paid Amount" column. So for the
above described transaction, the A/R balance is the sum total of the cost of
all the items sold on that invoice. But that invoice has been paid, long
before the end of the year. Why do these items still show up?
Any solutions would be appreciated.....
Any transaction that impacks either Accounts Receivable or Accounts Payable
and another balance sheet account will always show up on both the cash basis
and accrual basis reports. Somewhere in your system there is a receivable(s)
that is still open that is causing this to occur.