In consolidation engagements, you can post adjustments to the Trial Balance to eliminate changes that result from transactions between subsidiaries.
Note: When performing the following procedure, designate the entry as Eliminating in the Type drop-down menu. When you define an adjustment as an elimination, you include the adjustment in automatic documents with a column for eliminating entries.
To post an adjusting entry:
- On the ribbon, click Account | Adjusting Entries. The Adjusting Entries worksheet displays.
- Define the adjustment by choosing among the following settings:
- Current entry: Enter a reference number for the journal entry.
- Period Type: Choose the reporting period the adjustment applies to.
- Accounts: Choose whether the journal entry applies to a financial statement, a leadsheet, or the preparation of accounts for tax return filing.
- Type: Define the journal entry's type.
- Misstatement: If the adjustment records a misstatement, choose the basis for making the adjustment.
- Recurrence: Specify whether the adjustment is a recurring or reversing journal entry.
- Description: Describe the adjustment. This description is displayed in the automatic documents for journals.
- Reference: Choose a document from the document manager to refer the journal entry to it.
- On the first available cell in the Number column, hover your cursor over the right side to display a drop-down menu. Click the arrow to open the Type Letters for Quick Lookup dialog. Select the account where you want to make the adjustment and click Select.
- Enter an amount in the Total Amount field. To enter a credit, add a minus (-) before or after the amount.
- Repeat the process in the next row to select the balancing account.
You have made an adjustment. In the applicable document, it is displayed in the Adjustments column.