You may want your books on a Cash Basis for Income Tax purposes. This is easily done! Set up a separate journal for these types of entries. If you are tracking at an account level, this can be done in a Consolidation company, or if you are tracking at a Sub-Account level, in a combination company.

In our example, we used company CONSO, our consolidation company, to make these adjustments. We set up a special Sub-Account for those adjustments with one option changed so that we could create journal entries. (This is also how you can do elimination entries in the Consolidating company).

This Sub-Account also needs to be set up as a company, but no transactions need to exist in this company. In our example company, we turned on File Sharing. You must set up this company, but it will have no transactions.

You may print out a Working Trial Balance to assist you with accounts that need to be adjusted, or we have other reports that can also assist you.

Examples of listings that can be used are as follows: You need to adjust your Accounts Receivable and your Accounts Payable. Run an Aged Trial Balance (in the Accounts Receivable module) for your Accounts Receivable balances and an Open Item by Exp Sub-Acct (OI-3 under Reports in A/P) in your actual company for those accounts.

Set up a specific journal to handle your adjustments.

Create your journal entries for the consolidation company. Example of one journal entry created:

Once you have created the journal entries needed, you may run the Default Trial Balance with the option of the special journal selected in the Adjustments column with the Print Adjustment on the report, Jrnl(s): 205