If investment activity is allocated out using an incorrect revenue or expenses account and the books have since been closed, more than just a correcting journal entry is necessary. A correcting journal entry will not be properly allocated to the appropriate funds; therefore resulting in an open balance under the revenue share fund and a system error message when trying to close the books.
Reclassify Revenue Share Affected Accounts for a Closed Period
- Go to the statement voucher that requires the correction.
- Create a copy of the statement voucher. This allows for an easy correction without needing to create a brand new statement voucher from scratch with the necessary details.
- After you’ve copied the statement voucher, adjust the line items needing correction to be a negative amount. Be sure to leave the account choice the same, but update the description as needed.
- Add a second item with the account that the amount should be allocated to, a description noting the correction, and a positive amount totaling the amount that is being reclassified.
For example, in the image below, we are correcting a partial amount of $20,000. The first line item is a negative 20,000 to denote the amount that is being reclassified from the incorrect account, and the second line item is a positive 20,000 to denote the amount that is being reclassified to the correct account.
- Post the new statement voucher with the two items.