Lost Check

[Eden Whitehead]

A check to a vendor from 2007 is still outstanding (i.e., has never cleared the bank).

I think the time has come to consider it permanently lost and clear it out. (I attempted to contact the vendor some months back to see if he ever received it but never got an answer.)

What entry would I make to avoid affecting a true report of 2008 expense?
(Checking account is 01-1110-000;
expense account is 01-5412-000;
amount of check is $45.00)

Would I mark this an an end-of-year transaction?

Thanks,
Eden

[Matt]

Since this check is from 2007 the original expense has already closed into one of the fund balance accounts. This is one of those rare instances when you are justified in making a posting directly to the fund balance account, as this is a prior year adjustment to the fund balance. Determine what fund balance account the $45.00 expense originally closed into (you can see this by running the Account Close To Report in Fund Accounting) and then post the following entry in Fund Accounting to clear:

Debit checking account $45.00
Credit Fund Balance account $45.00

Use the original check number as the reference number. I would also include a note in the notes box that the original check was lost.