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Cash Basis General Ledger Detail

Cash Basis General Ledger Detail

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One of my clients is being audited by the IRS, the IRS requested that they send a detail general ledger – Cash Basis on Excel of their 2014 transactions.

Client is on the cash basis. Client uses the A/P module in QB to pay bills. The IRS downloaded the Excel File and striped the data into a few transactions.

I recreated the transaction on a new Company.  The IRS wants to know why on the detail GL Cash Basis, QuickBooks adds another
Debit and Credit to the AP account. The QuickBooks detail GL adds another Dr. to A/P and another Cr to A/P on 7/29/16.  I assume it is for accrual to cash conversion, but the IRS wants to see if anyone can explain this additional entry.

Any advice on this issue is welcome.

Sleeter GroupThis question was originally posted within the Sleeter group member discussion forums and has been shared with AccountingWEB as part of our ongoing collaboration to help firms grow and develop

 

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