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JCP843
April 14, 2025
Question

Asset account showing $2K but really there is $0.

  • April 14, 2025
  • 1 reply
  • 0 views

I am cleaning up the books for a Scout troop. Have an asset account showing $2K. It's a "declining balance" type account where funds are added from the general fund and used up as purchases a made at a specific Scout store. There is physically $0 in this account to use. I need to zero out this account but cannot use a journal entry b/c there is no money to move to another account. (Trying to reconcile where things went wrong is not possible at this point.)

Any help appreciated - not a QB superuser!

1 reply

Rainflurry
Rainflurry
April 14, 2025

@JCP843 

 

Is this balance from a previous year?  I will assume that it is.  If not, please advise.  How have transactions from this account been recorded in the past?  Are the purchases recorded as an expense with a corresponding reduction in this asset account, similar to a prepaid expense account?

 

If I understand correctly, and $ 2,000 is in the asset account but the funds have been spent, then you need to create a journal entry (JE) or create a $0 bill if you have a dummy vendor to use.  The JE is a debit to Retained Earnings/Change in Net Assets (depending on what equity account the organization has) and a credit to the asset account for the balance.  Or, create a bill and enter Retained Earnings/Change in Net Assets as a positive amount on line 1, and the asset account as a negative amount on line 2.  Either method will clear the balance in the asset account, it just depends on how you want the transaction recorded.    

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