Accounting & Bookkeeping & Small Business Forum

[trarob]

I'm setting up a customer in QuickBooks starting with 2005 information so we can do comparisons of current year to previous year etc. My customer doesn't have all paperwork from 2005 so I can't enter the transactions individually. I have 1099s from the companies he worked for, 1099s to the subcontractors he hired, bank statements, and copies of all checks. What is the best way to enter these transactions as General Entries? I was thinking the following:
Subcontractors: Credit the Bank, Debit COG Labor
1099s paid to my client: Debit the Bank; Credit Accounts Receivable (?)-I don't think this will be right because then my A/R will have a negative value left in it
Supplies: Credit the Bank; Debit COG Supplies
Any owner withdrawals: Credit the Bank; Debit Owners Withdrawal
Anything left on the bank statement not accounted for make a journal entry Credit the Bank and Debit Owner's Withdrawal
Just an FYI, the tax return is wrong so I can't use the figures off it. We will correct that after getting the year set up correctly as it should have been.

[stasia2003]

trarob wrote: I'm setting up a customer in QuickBooks starting with 2005 information so we can do comparisons of current year to previous year etc. My customer doesn't have all paperwork from 2005 so I can't enter the transactions individually. I have 1099s from the companies he worked for, 1099s to the subcontractors he hired, bank statements, and copies of all checks. What is the best way to enter these transactions as General Entries? I was thinking the following:
Subcontractors: Debit the Bank, Credit COG Labor
1099s paid to my client: Credit the Bank; Debit Accounts Receivable (?)-I don't think this will be right because then my A/R will have a negative value
Supplies: Debit the Bank; Credit COG Supplies
Any owner withdrawals: Debit the Bank; Credit Owners Withdrawal
Anything left on the bank statement not accounted for make a journal entry Debit the Bank and Credit Owner's Withdrawal
Just an FYI, the tax return is wrong so I can't use the figures off it. We will correct that after getting the year set up correctly as it should have been.

Did you realize that your debits and credits are switched? When money is going out you CREDIT the bank and DEBIT expenses or Owner's Draw.

The bank statements and the copies of the checks should be sufficient in order to come as close as possible to accurate. That's typically what I go off of when I'm imputting past transactions.

[trarob]

Thanks for the catch. I corrected. I dreamed about this last night so I think I'm on overkill with the whole thing. Do you agree with my transaction on the 1099s paid to my client with A/R having a negative balance. I haven't put it into QuickBooks yet, but I think QB will give it a negative balance. I feel there should be some other transaction I should do to clear out A/R.

[irsfixer]

If you enter 1099's received they would be a credit to revenue and not accounts receivable. The only time A/P or A/R are used in a reconstruction, is if the amounts are still unpaid.

I personally would enter deposits from the bank statements for revenue and then reconcile the 1099's to these amounts.

[trarob]

Thanks so much. I didn't feel the A/R transaction was going to be right. I thought about using the deposits and balance to the 1099s, but they don't match up. The bank is much higher than the 1099s.

[irsfixer]

trarob wrote: Thanks so much. I didn't feel the A/R transaction was going to be right. I thought about using the deposits and balance to the 1099s, but they don't match up. The bank is much higher than the 1099s.

Then you really must use the bank statements and this is exactly why I suggested using the bank statements. Allow the client to explain any deposits that may be loans, transfers, etc., and that should not be in income. One reason the deposits are higher could be that he does not get 1099's for all of his income.

[trarob]

Good point. I will use the bank statement deposits instead and just won't be able to categorize which client the deposits came.