Cleaning up messy books!
Good morning, our favourite thing: messy books! lol.
I have a client who is sole proprietor and I have inherited their messy books set up by someone else.
There are bank accounts no longer used and credit cards with a balance that does not match statements.
The credit cards do not match because at times she paid the balance with her personal use account but the previous bookkeeper did not process the payment or reconcile the credit card. The expenses were recorded but not the payments which should have been done to owners equity.
She has bank accounts and credit cards for business use only, which is good.
Sole proprietors are the business, it is not a separate entity as we all know. All expenses and revenues have been recorded but not all transfers into the business use accounts from her personal use accounts have been. This does not effect the P & L but it does not reflect her true owner's equity.
I would like to close those old accounts off her books and set her outstanding credit card balances to true values. Can this be done with an entry to owners equity?
thank you