Friday, November 14, 2008

Adjusting Journal Entries from your CPA

As a consultant for many small businesses, it really bothers me when a CPA does not make sure after the tax return has been done that the client’s books match the tax return. Most small businesses don’t understand or realize the importance of this. Many small businesses rely on their CPA for accurate numbers, not realizing that they should and could have financials that match their CPA records at their fingertips, on their own computer.

Adjusting journal entries are entries that are done once your CPA reviews your books and makes any changes before filing your tax return. These adjusting journal entries should be given to you along with your tax return. They will include depreciation (if not previously posted), may include changes to fixed assets and prepaid expenses as well as loans if the interest expense had to be adjusted. If any personal expenses were paid from the business the adjustments will also include changes to the owners equity.

Your CPA works for you, ask for your adjusting journal entries and post them in your books if the CPA hasn’t done that for you. If you need help, we can help at Success In-Formation LLC.

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