Q: How do we void a check written in a prior year after tax returns are filed?
- Void the check as usual.
- Create two general journal entries.
- The first journal entry, dated the same day as the original check, duplicates the accounting entry of the original check. This assures no changes will be made to the prior period’s reports.
- The second journal entry, dated in the current period, reverses the accounting entry of the original check. This adds cash back to the checkbook balance in current period.
If you are voiding a check associated with non-expense accounts or items (a check used to purchase inventory items, a bill payment check, a paycheck, a payroll liability check), you should consult with your accountant.