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Even though almost all small businesses use the cash basis of reporting for their tax returns, QuickBooks states up front that the program is not designed to be used cash basis and will report anomalies. It suggests fixing the problem manually. Here is how to do that:
The above describes a simple way to fix your cash basis accounts receivable. Similar entries may be needed to fix your inventory, sales tax payable, and accounts payable. An experienced tax person should be able to do this for you. Or a great bookkeeper such as Liz Mayta in San Mateo can handle it. QuickBooks also has a link to its database of local QuickBooks experts.
Bess Kane, CPA |