Changes that are made to A/R 1200 and A/P 2??? occurs when you are posting sales/purchase invoices and receipts/payments. That is really the only way to change the A/R1200 and A/P 2???  balance. So your accountant wants you to credit A/R 1200 (which reduces the amount owed to the company by the customers) and debit a revenue acct 4003 for same amount (which decrease your total sales). To do so you will need to ask your accountant for a list of customers and amounts that makes up this 31000.00 and then select each customer to create an invoice for a specific amount related to that customer, enter that amount as a negative number, coding it to 4003.

If it's the other way around - debit A/R1200 and credit 4300 - then the amount entered to each affected customer would be a positive amount.

The same goes for the purchase prepayments.

Also ask the account why this is being made - that you have just taken over the books and you would like to know what errors or transactions were previously made to cause this 31000.00 adjustment to be made.

Hi Ava56,

If any suggestions provided in this thread is able to help you resolving your issue, would you please click the 'Yes' button to the question - 'Did this answer the question?'  The thread will be marked as answered, which will benefit other users who have the same issue.  Thanks a lot.

Sometimes these adjustments to the trial balance are for 'presentation purposes', in the accountant's software and do not need to be entered in Sage 50.  

The purchase prepayments also may be netted off / combined with other amounts owing to the same vendor strictly for presentation purposes, and may not need to change your records to match.

As Smithco says, you need to know what's up.

Thank you again all so much for your help.....I have felt like a fish out of water for days!!!

I am new to the program and it cause me headaches to say that least.

Last thing....I have done all the entries but it does not allow me to change the Prepaid expenses balance....I have no idea what this.  The adjusting entries that I was make was supposed to close out this balance but it didn't it put it into Accounts Receivable.  I think the prepaid balances were for the previous year.  Does anyone have any suggestions on how to move/adjust the Prepaid Expenses 1300 to the Accounts Payable 2100?

I am a little confused since you said ***The adjusting entries that I was make was supposed to close out this balance but it didn't it put it into Accounts Receivable*** and also you are talking about Accounts Payable. I am going to assume you meant Accounts Payable. You are a bit vague on the details and without knowing what your accountant is asking you to do I can only guess at what it is.

Most likely that was already entered thru Accounts Payable and coded to the prepaid account 1300.

For example Property Taxes would be posted thru purchase module and coded to prepaid account 1300 because this amount that was paid is for the whole year. Then every month 1/12 of this amount will be expensed to property tax expense thru journal entry by crediting prepaid expense and debiting property tax expense.

You will need to find out what makes up this balance in the Prepaid Expense 1300 in order to know where to expense it and then do a journal entry to credit prepaid expense 1300 and debit a 5000 expense account. There are many items that can go into prepaid expense such as vehicle insurance which was paid for the whole year, property taxes, annual memberships and subcriptions, liability and property insurances, etc etc.

If you are not familiar with this then it might be a good idea to take up an online course or an evening course on basic bookkeeping - that will likely help with understanding what the accountant is asking you to do.