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[Fwd: Voiding a invoiced transaction]

This is from my CPA.

-------- Original Message --------
Subject: Voiding a invoiced transaction
Date: Tue, 10 Oct 2006 16:44:46 -0700
From: David Kawasaki <..hidden..>
To: Joshua D. Drake <..hidden..>

The following things should occur, not necessarily in this order, but
should be all made to the current period...not effecting any prior
period (i.e., month):
Reverse the sale -
Debit the corresponding revenue account
Credit the accounts receivable account - two parts to this - one
recorded in the general ledger, the second adjusting the subsidiary
ledger (or client-detail screens)
This side of the entry should illicit a response for the client, invoice
number, etc. (the more ways to bring it up, the better)
The entry into the client detail should effectively offset the invoice
(no longer outstanding) and show up in the client screen similar to a
payment on account, except with a different description
Reverse the cost of sale, if applicable -
Debit the appropriate inventory account (two parts to this - one
recorded in the general ledger, then second adjusting the inventory
ledger (item specific)
The appropriate inventory item should be gleaned from the original
invoice - and if returned, should be added back to the counts
An option should be given to input another account for the cost
adjustment, assuming the inventory does not come bake (i.e. damaged,
spoiled, etc.). These should not enter back into the inventory system.
Credit the corresponding cost of sales
In all cases, an accounting trail is a must. That is to say, each entry
into the accounting system should generate a line item transaction in
some part of a report. Example, the general ledger could capture just
the transaction summaries for the posting period, as long as there is a
way to print the detail of these summaries (usu prompted before posting).

First try. I know I used some acctg jargon, but I'm sure most should be
aware of them. If not, I can explain differently. Also not sure of the
amount of detail needed. Let me know and I can tweak one way or another.

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be used for the purpose of avoiding penalties that may be imposed by the

David Kawasaki, CPA
PH: (503) 297-1072
FAX: (503) 297-6634
E-MAIL: ..hidden..

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