Updating quickbooks for a client

Transactions from previous years are showing up in the reconciliation window because....

a) they were never reconciled or b) they were reconciled then inappropriately altered or c) they are duplicates

You'll have to take the time to find out which of the above happened.

Read the help section on how to do inventory adjustments. Its really pretty easy but you'll need to know how they were initially entered and how your CPA chose to deal with them in order to adjust them to the correct accounts.

If your CPA has already adjusted your books then be very careful about making adjustments. Don't make adjustments to anything prior to the date he included in his/her adjustments.

Closing years in QB isn't necessary nor is it required like in some other accounting programs. You may want to close the period for 2004 to preserve the CPA's adjustments from accidental tampering though.

Hi Tara,

Thank you for informative message.

Regarding the bank rec..It seems those transaction were never reconciled..how do I deal with that?

Thanks HR

It depends on what happened. Were those transactions never completed (as in checks not cashed) or did the previous bookkeeper not check those transactions off and instead dumped the discrepancy amount in an income or expense account? How has the CPA dealt with these items?

If the items were never actually cleared and the CPA hasn't done anything with them then you could void them. If they cleared the bank but weren't checked off during reconciliation then you'd find out where the discrepancy amount went during that reconciliation and then make a journal entry. Talk to the CPA first though.

Becareful about voiding prior years checks. QB will void them using the original date of the check.

If the bank recs have never been completed then I would start with the January 2005 bank statement. Go through the 2005 bank statements and list all of the checks from 2004 that cleared in 2005. They should mostly be the ones from November & December 2004. Then clear all of the prior year(s) checks except for those that cleared in 2005. Do the normal January 2005 reconciliation. If necessary do an adjustment on 1/31/05 so that your bank balance is correct and then proceed to do the remaining months of 2005 until you are caught up to date. Remember, you don't want to change the bank balance for 12/31/04 or you won't match the CPAs records but you can change this years balance.