Discussion:Why Didn't CPA Include Undeposited Funds on 1120S?
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| Revision as of 14:36, 10 October 2009 Smokeytax (Talk | contribs) (Perhaps it's rel) ← Previous diff |
Revision as of 16:53, 10 October 2009 Michaelstar (Talk | contribs) (Southpark's answ) Next diff → |
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| All of this as per what their infamous "previous accountant" had advised them was standard procedure.}} | All of this as per what their infamous "previous accountant" had advised them was standard procedure.}} | ||
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| + | {{ForumReplyPost|UserID=Michaelstar|Date=10 October 2009|Text=Southpark's answer seems most in line with my thinking on this as well. | ||
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| + | What strikes me though as strange - is a June y/e for an S-Corp. There are specific rules on required y/e's for S-Corps so I hope that is not an issue that has not at least been checked on as well.}} | ||
Revision as of 16:53, 10 October 2009
Discussion Forum Index --> Basic Tax Questions --> Why Didn't CPA Include Undeposited Funds on 1120S?
Discussion Forum Index --> Tax Questions --> Why Didn't CPA Include Undeposited Funds on 1120S?
| 10 October 2009 | |
| I have a cash-based S corp client whose fiscal year ends June 30th. In reviewing the client's return for period ended 6/30/09, I see that the CPA didn't include the client's 8k in undeposited funds on the balance sheet (1120S Schedule L). Obviously, the books accounted for the amount.
Sound like an error on behalf of the CPA? Doesn't sound like good practice to me. I'm going to call her (CPA) on Mon. | |
| October 10, 2009 | |
| So how did the CPA get the Balance Sheet to balance if the 'undeposited' funds weren't on there?
I usually include them in the cash figure, assuming that the funds are subsequently deposited within a reasonable time. | |
| 10 October 2009 | |
| It's not in balance. I'm e-mailing her now and will follow-up Mon. She literally just left out the 8k on Line 1-Cash.
So, now the balance sheet in QB is off by 8k vs. the 1120S, Schedule L. Nice. | |
| October 10, 2009 | |
| Yikes!
My software (while no substitute for a tax professional - Hi Kevin) SCREAMS at me if things don't balance. Keep us posted on the outcome. And it's interesting that you have an S-corp with a fiscal year end. Rather unusual, I believe. | |
Southparkcpa (talk|edits) said: | 10 October 2009 |
| My guess is that the CPA treated it like Accts receivable and "backed it out" of income and either it is NOT on the balance sheet and is backed out of income OR he treated is as M1. Wrong, but if we are playing family feud, that has to be a top guess!
Personally, I "HATE" when I see an accrual Balance sheet on a tax return that is cash basis and then see an M1 item called "acc to cash diff". Please let usknow. | |
| 10 October 2009 | |
| Perhaps it's related to one of those Urban Legends, that I think we've discussed on this forum.
Specifically, when our cash basis clients inform us that they held up on depositing all checks that came in after November 1 in order to avoid paying tax on the income. It's almost as good as when they tell us that they left a few checks blank so that they could write checks dated 12/31 after the fact & still have them be in order relating to the January checks they wrote subsequently. All of this as per what their infamous "previous accountant" had advised them was standard procedure. | |
Michaelstar (talk|edits) said: | 10 October 2009 |
| Southpark's answer seems most in line with my thinking on this as well.
What strikes me though as strange - is a June y/e for an S-Corp. There are specific rules on required y/e's for S-Corps so I hope that is not an issue that has not at least been checked on as well. | |
