About Adjusting Entries
For Month End and Year End

by L. Kenway BComm CPB Retired

The article is now only available to my newsletter subscribers and discusses:

  • booking estimates,
  • reclassifying transactions,
  • reversing transactions,
  • accruals and deferrals 

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So sorry about that!

My chat titled "What are prepaid expenses?" is found in the tax section.

Following are two excerpts from the chat:

  1. How to write-off bad debt in QuickBooks; and
  2. About entering adjusting entries in QuickBooks


How To Write-Off Bad Debt In QuickBooks®

In QuickBooks®, write off an individual customer bad debt using the allowance method, use the "Credit Memo" button on your invoices or sales receipts ...

... be sure you have setup a bad debt item as an Other Charge in your item list (coded to the account bad debt allowance NOT bad debt expense if you are doing GAAP bookkeeping) ...

... and select the bad debt item when recording the credit memo.

Note: GAAP books bad debt using the bad debt allowance account. If you are doing your books on a tax basis, your Other Charge item would be coded to bad debt expense instead of bad debt allowance.

Learn more about writing-off bad debt.


About Entering Adjusting Entries To QuickBooks®

Most month end adjusting entries should be done using the proper QuickBooks® form rather than the manual journal entry if you want the entry to post and report properly.

  • Amortization, loan interest, and tax provisions should be done through a manual journal entry.
  • Inventory, payroll or sales tax should NOT be done through a manual journal entry. Your subsidiary ledger will not balance to your general ledger if you use the manual journal entry.

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