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ZaddY · 04-28-2008, 01:54 PM

I would first go through the 2007 bank statements looking for checks & deposits from 2006. Then I would do one large bank rec for 12/31/06 and clear everything from 2003-2006 except for those that cleared in 2007. Use the opening balance on the Jan 2007 bank statement as your ending 12/31/06 balance. You may need to do an adjustment to get the bank statement to reconcile properly. Since this relates to prior years create an account called Prior period adjustment under "Other expense" and post the adjustment there. (The CPA will probably move that adjustment to Retained Earnings at tax time.) This will keep 2007 clean of adjustments and allow you to continue to enter all of the 2007 transactions.

04-28-2008, 01:54 PM	#2 (permalink)
ZaddY Status: Owner/Administrator Join Date: Mar 2008 Location: Berkeley, CA Posts: 160	I would first go through the 2007 bank statements looking for checks & deposits from 2006. Then I would do one large bank rec for 12/31/06 and clear everything from 2003-2006 except for those that cleared in 2007. Use the opening balance on the Jan 2007 bank statement as your ending 12/31/06 balance. You may need to do an adjustment to get the bank statement to reconcile properly. Since this relates to prior years create an account called Prior period adjustment under "Other expense" and post the adjustment there. (The CPA will probably move that adjustment to Retained Earnings at tax time.) This will keep 2007 clean of adjustments and allow you to continue to enter all of the 2007 transactions. __________________ Zahid H. Lilani