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Here we are in our custom zero homepage going into the new company file we set up in a prior presentation that being get great guitars we're going to duplicate some tabs to put reports in like we do every time right click on the tab up top to duplicate it and then we're going to right click on that tab again and duplicate again as the one to the right is thinking we'll go to the middle tab Accounting drop down look at that balance sheet report and then I'm going to tab to the right as that one is thinking accounting drop down this time the income statement or profit and loss then I want to go back to the middle tab to change the date range hitting the drop down custom range I'm working here in 2023 end of the year that's what we have thus far and the profit and the loss is good to go nothing's in the profit and loss thus far so this time we want to go into the make an adjustment so we're going to imagine an error happened in the data input and drill down on that and make an adjustment to that transaction now we've seen this a couple times that we've made some adjustments to certain transactions within the data input process we want to do it here and just note that as we do however we do of course want to be quite careful with adjusting information that has already been put in place so in other words if there's been an error in the data input in the past then your options going forward will typically be do I want to make another transaction which will reverse the prior transaction which is usually the more professional thing to do because that provides you an audit trail so if something was off the way to fix it oftentimes might be to say hey look I would like to do another transaction that reverses the prior transaction so I can see an audit trail of what is happening if it was a check or a transaction many transactions you might be able to void the transaction which also gives you some bit of transparency with it but you still have to be careful especially if you're adjusting transactions that happened in a prior accounting period like a prior month or a prior year in particular now for example in the United States if you're small business for example you you might be using your financial statements to help you with your tax preparation at the end of the year and so what you don't want to have happen is is that you create your income statement for example you have income and expenses on the income statement and then you realize that some of those expenses maybe were duplicates or something like that on on the income statement and therefore you have to void checks for example let's say because because you had duplicate checks or something like that if you simply delete the check that happened in the prior period the prior year in this case then it will actually adjust the income statement that you have already finalized because you used it in order to generate your tax return so unless you're gonna actually amend your tax return or amend your financial statements if you're looking at some other scenario then you want you don't want to mess up your prior period income statement because because what you want to do is make the adjustment in the current period on the timing statement which is going to be the profit and loss so that's something to just keep in mind now note that you can close out periods to see to make sure you don't do that for example you can see when that happens you can tell that something went wrong from year to year from period to period if you finalized for example last year's financial statements when you did the taxes or financial statements as of December 31st and then you try to do your statement of equity in other words you look at your beginning equity account as of January before any transactions happened of the following year if your beginning equity account doesn't tie out to what it was at the end of last year then probably something happened meaning probably transactions were deleted in the prior year and then you got to figure out well what are you gonna do at that point in time you might need to make an adjustment or something like that if you're trying to make your full financial statements as of the current year because your retained earnings won't flow over properly so one way to kind of prevent that is you could try to close the accounts either on a monthly basis or a yearly basis so if you go to the accounting drop-down and you go into the advanced settings then you go into your financial settings and possibly close or lock dates and if you're able to to lock the date then that could prevent you or others hopefully from entering transactions mistakenly in a prior period for example or deleting transactions in a prior period so just something to be aware of that said however it is quite easy to actually adjust transactions within the zero accounting system which is great on on the one hand but again could cause issues on on the other hand with regards to those prior period adjustments the other thing you want to kind of keep in mind is that if you're going back in and adjusting a transaction you think was wrong in the past is whether or not the transaction is going to be tied to some other item that is linked to it so for example when we have a purchase order when we enter the purchase order we will typically often like use the purchase order to create the bill and then the bill might be used to create the invoice so once we have those links type of transactions you want to make sure that you understand the flow of the transactions and how they're linked and related to other transactions so that if you delete it you understand what's going to be the consequences of that other place you want to be careful of it is with payroll if you have a payroll transaction that was actually used through the payroll in like gusto that works through zero then it becomes quite difficult to to change transactions you can't just really go in there and adjust the check that easily you'd possibly usually have to just process the payroll again meaning you got to basically delete the check and process it again because the whole payroll system has to properly calculate all the withholdings and all that kind of stuff but if it's just a straight money transaction then you may be able then then you can kind of adjust it so the way we could do that of course is we can say let's say that something and this furniture and equipment was wrong I'm gonna go into it and drill back down on it and I'm going to look at my transaction and see the one that is wrong now note oftentimes when you might see that something is incorrect is when you do the bank reconciliation so meaning everything goes through cash at some point in time generally right so so when you're buying stuff at the end of the day cash is going out when you're selling stuff at the end of the day cash is coming in so if you're doing a full-service accounting system you're entering the transaction as you say write the check in this case we imagine we wrote a check for this one then then if if you put the data input into the system incorrectly possibly because you hand wrote the check with the checkbook and then you entered it manually into the system and miskeyed the amount that went into the system you will see that not with the primary check on the on on errors which is the double entry accounting system itself the fact that the balance sheet is in balance but with the second best method for double check-in you don't have an error the bank reconciliation when you do the bank reconciliation you'll you'll see that what actually cleared the bank is different than what was put into the system and then you can see what you want to do from that point in time and so in this case we're gonna adjust it I'm gonna hit the drop-down and edit the transaction and I'm gonna say that this one should have been 16,000 so I'll go in here say that should be 16,000 we'll say and then it's as easy as that to adjust the transaction we will say okay and boom and then back to the accounting drop-down go into the good old balance sheet and see where we stand at this point in time hitting the drop-down we want to go to the custom date range 2023 and take a look at it through the end of the year and so now we're at the 98,000 on the furniture and equipment and the 7,500 accumulated depreciation so there's our adjustments so now I'm gonna go up to our trial balance and take a look at our trial balance to see where we stand at this point right click duplicate the tab again nothing's on the profit and loss thus far we've been doing all this data input haven't yet put anything on the income statement yet but we will get there we're gonna then say all right let's go to the reports on the left and let's type in the trustee trial balance to see where we stand where do we stand at this point in time we stand on the trial balance the trustee T to the B hitting the drop-down changing the range we're gonna go to 2023 and okay so we stand on these two legs on the debit and credit legs of the trial balance and so if your numbers tie up to these numbers great if not then check your date range it might be this number not not this number that would be off in the checking because that's what we adjusted this time so note that if your prior if you checked your numbers in the prior presentation then we should be good that should be your baseline and then we just see the adjustment so any errors that happen have to have happened from the prior point to this point is the general idea and we made changes to the checking account and the furniture and equipment so you can try to increase the date range to see if it's a date issue which is often the case when working practice problems because they were not working them in real time so you can then drill down on those issues if they come up just like we showed here and change the date range to the appropriate range or date