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Naomi4's avatar
Naomi4
Contributing User
3 years ago

How to clear Customer and Supplier Balances after selling the business

Hello All   I need some assistance in clearing customer & supplier balances after an entity of ours was sold (divested) to another business. (I work in the NFP sector and the business did not cease...
  • Mike_James's avatar
    Mike_James
    3 years ago

    Hi Naomi4 , welcome to the forum.  To zero out these amounts without affecting the general ledger,  process a service transaction for each balance but of the opposite sign,  and allocate each amount to the receivables or payables control account.  GST code of N-T probably applies. Date all as 1.7.21 to match the general journal. 

     

    Record each transaction then settle all the sales credits and purchase debits at 1.7.21. Then check that the reports show nil and that the GL balances of the control accounts have not changed. 

Naomi4's avatar
Naomi4
Contributing User
3 years ago

Help still required here, would appreciate contact from anyone who has used the same company file for various entities and then sold one of them and would have had to clear debtors/creditors after the sale/transfer date.

  • Mike_James's avatar
    Mike_James
    Ultimate Cover User
    3 years ago

    Hi Naomi4 , welcome to the forum.  To zero out these amounts without affecting the general ledger,  process a service transaction for each balance but of the opposite sign,  and allocate each amount to the receivables or payables control account.  GST code of N-T probably applies. Date all as 1.7.21 to match the general journal. 

     

    Record each transaction then settle all the sales credits and purchase debits at 1.7.21. Then check that the reports show nil and that the GL balances of the control accounts have not changed. 

    • Naomi4's avatar
      Naomi4
      Contributing User
      3 years ago

      Thank you Mike_James 

      something so simple and I was just lost.

      Appreciate your response.

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