My accounts receivable shows invoices as unpaid that customers already paid — how do I find and fix the wrong balances?

Before you change anything: did the money arrive, and where did it get recorded?

The article states it is important to establish exactly what happened in reality before changing anything in QuickBooks. (jurisdiction: United States, entity_scope: QuickBooks Desktop users correcting a payment made by the wrong method, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“It is important that you probe and understand exactly what happened in reality before you change anything in QuickBooks.”

An account receivable is documented through an invoice that the seller is responsible for issuing to the customer, and that invoice describes what was sold, the amount owed (including sales taxes and freight charges) and when payment is due — so the invoice is the document identifying the individual open receivable. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: sellers with trade accounts receivable)

“An account receivable is documented through an invoice , which the seller is responsible for issuing to the customer through a billing procedure . The invoice describes the goods or services that have been sold to the customer, the amount it owes the seller (including sales taxes and freight charges), and when it is supposed to pay.”

There is usually a dedicated general ledger account that compiles all customer-related receivables (trade receivables), while other receivables, such as employee advances, are classified in other accounts. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities maintaining a general ledger with a trade receivables account, conditions: stated as the usual arrangement, not as a universal one; the examples of other receivables are given as an open 'such as' list)

“There is usually an account in the general ledger that is specifically designated for the sole compilation of all receivables related to customers (known as trade receivables ). All other receivables, such as those for employee advances, are classified in other accounts.”

For services sold on credit, the seller normally raises an invoice that credits the sales account and debits accounts receivable; when the customer later pays that invoice, the seller would debit cash and credit accounts receivable — so the customer receipt is recorded against the receivable, not against sales a second time. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: sellers of services on credit using accounting software, accounting_basis: accrual basis, conditions: stated as what the seller normally does; the payment entry is stated as what the seller 'would' do; illustrated for a single invoice; the article does not address part-payment of one invoice or one receipt settling several invoices)

“When services are sold to a customer, the seller normally creates an invoice in its accounting software, which automatically creates an entry to credit the sales account and debit the accounts receivable account. When the customer later pays the invoice, the seller would debit the cash account and credit the accounts receivable account.”

Partly established. Established: where in the ledger the money was recorded if it did arrive (S14, S20); that determination made before any correction is posted (S01). Missing: the diagnostic principle that the first determination is whether the money arrived at all; how that determination is made from the bank record and the ledger.

Required authority: high quality professional secondary reference. Highest achieved: official platform documentation.

Establishing the true position: the open invoice, the receivables account and the detail behind it

See An account receivable is documented through an invoice that the seller is responsible for issuing to the customer, and that invoice describes what was sold, the amount owed (including sales taxes and freight charges) and when payment is due — so the invoice is the document identifying the individual open receivable.

See There is usually a dedicated general ledger account that compiles all customer-related receivables (trade receivables), while other receivables, such as employee advances, are classified in other accounts.

All outstanding accounts receivable are compiled into the accounts receivable aging report, which is typically structured into current and overdue buckets of 0-30, 31-60, 61-90 and 90+ days. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: entities with outstanding accounts receivable, accounting_basis: accrual basis, conditions: the bucket structure is described as typical, not mandatory)

“All outstanding accounts receivable are compiled into the accounts receivable aging report, which is typically structured to show invoices that are current, overdue by 0 to 30 days, by 31 to 60 days, 61 to 90 days, or 90+ days.”

The detailed listing of unpaid customer billings is usually held in a subsidiary sales ledger, and that listing should match the ending balance in the general ledger. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities that keep a subsidiary sales ledger of unpaid customer billings, conditions: the location of the detail is stated as usual, not universal)

“The detailed listing of unpaid customer billings that should match the ending balance in the general ledger is usually recorded in a subsidiary sales ledger .”

Partly established. Established: how a bookkeeper determines whether a customer receipt exists (S14, S18); how a bookkeeper determines where the receipt was recorded (S14); the determination made before any receivables correction is posted (S01). Missing: use of the bank record and the ledger to make that determination.

Required authority: high quality professional secondary reference. Highest achieved: official platform documentation.

The recording errors that leave a paid invoice open or create a balance nobody owes

Errors commonly found during an accounts receivable reconciliation include duplicate invoices, omitted cash receipts, unapplied payments, misapplied customer payments, unsupported credit memos, unapproved write-offs, incorrect customer coding, stale debit or credit balances, and manual entries posted directly to the control account; the list is given as examples of common errors, not as a closed set. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities reconciling accounts receivable with a control account and customer-level detail, conditions: open list, introduced by 'include')

“Common accounts receivable reconciliation errors include duplicate invoices, omitted cash receipts, unapplied payments, misapplied customer payments, unsupported credit memos, unapproved write-offs, incorrect customer coding, stale debit or credit balances, and manual entries posted directly to the control account.”

A journal entry posted to the general ledger receivables account that bypassed the subsidiary sales ledger may cause a difference, and the article says this is the most common reason for a difference. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities with a general ledger receivables control account and a subsidiary sales ledger, conditions: offered as one of several possible reasons)

“A journal entry might have been made to the general ledger account that bypassed the subsidiary sales ledger. This is the most common reason for a difference.”

A billing may have been posted accidentally to an account other than trade receivables, which the article calls the least common reason for a difference because the billing module is set to record all billings automatically to the correct account. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities whose billing module posts billings automatically to the trade receivables account, conditions: rarity is attributed to automatic posting by the billing module)

“A billing might have been accidentally posted to an account other than the trade receivables account. This is the least common reason for a difference, since the billing module is set to automatically record all billings to the correct account.”

The common reconciliation errors listed can distort receivables, revenue, cash and allowance calculations. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities affected by the listed accounts receivable reconciliation errors, conditions: hedged: the errors 'can' distort these figures)

“These errors can distort receivables, revenue, cash, and allowance calculations.”

A second circumstance the article lists under which Unapplied cash payment income may appear is entering payments without matching them to sales forms. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, accounting_basis: cash, conditions: listed as one of the circumstances in which the account 'may appear')

“You entered payments without matching them to sales forms.”

If the automatic application of payments is switched on in QuickBooks, payments are posted automatically to the oldest open invoice. (jurisdiction: United States, entity_scope: QuickBooks Desktop users who have set QuickBooks to automatically apply payments, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026, conditions: automatic application of payments is enabled)

“If you set QuickBooks to automatically apply for payments, your payments will be automatically posted to the oldest open invoice.”

Required authority: high quality professional secondary reference. Highest achieved: high quality professional secondary reference, official platform documentation.

The recognised error classes found in receivables

See Errors commonly found during an accounts receivable reconciliation include duplicate invoices, omitted cash receipts, unapplied payments, misapplied customer payments, unsupported credit memos, unapproved write-offs, incorrect customer coding, stale debit or credit balances, and manual entries posted directly to the control account; the list is given as examples of common errors, not as a closed set.

The article's list of reasons for a difference between the receivables detail and the general ledger is presented as several possible reasons, not as a complete list. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities reconciling receivables detail to the general ledger, conditions: list is open, introduced as 'several possible reasons')

“Here are several possible reasons for these differences:”

See A journal entry posted to the general ledger receivables account that bypassed the subsidiary sales ledger may cause a difference, and the article says this is the most common reason for a difference.

See A billing may have been posted accidentally to an account other than trade receivables, which the article calls the least common reason for a difference because the billing module is set to record all billings automatically to the correct account.

Tracing where the receipt actually landed

On the Open Invoices report, an unapplied customer payment surfaces as a row whose Transaction Type column reads 'Payment'. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, conditions: within the Open Invoices report for the chosen report period)

“In the Transaction Type column, locate any transaction listed as a Payment .”

The article directs the user to check whether the Payment transaction on the Open Invoices report has a matching open invoice listed on the same report. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026)

“Check if that Payment transaction has a matching open invoice listed on the report.”

Transaction history is the place to locate and edit a payment that was recorded as a full payment when it was actually a partial payment. (jurisdiction: United States, entity_scope: QuickBooks Desktop users correcting a payment amount, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“Check transaction history so you can locate and edit the payment that was recorded as full payment when it was actually a partial payment”

The navigation path to recorded customer payments in Zoho Books is Sales > Payments Received. (jurisdiction: United States, entity_scope: Zoho Books organizations using the Payments Received module, platform: Zoho Books, platform_edition: US (US-EN help edition), conditions: instruction step, stated for viewing, recording, refunding and importing payments received)

“Go to Sales > Payments Received .”

On the Zoho Books Payments Received page, a payment carrying an over/excess amount shows different values in the Amount and the Unused Amount columns, which is how such payments can be spotted there. (jurisdiction: United States, entity_scope: Zoho Books organizations using the Payments Received module, platform: Zoho Books, platform_edition: US (US-EN help edition), conditions: applies to payments that have over/excess amounts)

“Pro Tip: Payments which have over/excess payments will have different values for the Amount and the Unused Amount in the Payments Received page.”

Partly established. Established: what evidence confirms the match once found (S15). Missing: searching the ledger by amount, date and customer; searching across income accounts, the bank account and unapplied credits.

Required authority: high quality professional secondary reference, official platform documentation. Highest achieved: official platform documentation.

Where your accounting system shows unapplied receipts, credits and a customer's transaction history

In QuickBooks Online, a Profit and Loss report run on the cash method might show an account called Unapplied cash payment income; QuickBooks itself creates that account, which the article says is for proper tax reporting. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, accounting_basis: cash, conditions: Profit and Loss report run using the cash method)

“When running a Profit and Loss report using the cash method, you might see an account called Unapplied cash payment income . This account is created by QuickBooks for proper tax reporting.”

To start locating unapplied cash payments in QuickBooks Online, the user goes to Reports and then Standard reports. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026)

“Go to Reports , then Standard reports ( Take me there ).”

See On the Open Invoices report, an unapplied customer payment surfaces as a row whose Transaction Type column reads 'Payment'.

See The navigation path to recorded customer payments in Zoho Books is Sales > Payments Received.

See On the Zoho Books Payments Received page, a payment carrying an over/excess amount shows different values in the Amount and the Unused Amount columns, which is how such payments can be spotted there.

From an open invoice, the transaction history is reached through the Reports tab by selecting Transaction History. (jurisdiction: United States, entity_scope: QuickBooks Desktop users with an invoice open, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“Go to the Reports tab and select Transaction History”

In QuickBooks Desktop for Mac the correction begins in the Accounts Receivable register. (jurisdiction: United States, entity_scope: QuickBooks Desktop for Mac users, platform: QuickBooks Desktop for Mac, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“Open the Accounts Receivable register.”

When an already-applied payment is changed, QuickBooks warns that the payment has been used to pay invoices and that changing it will alter how it is applied to those invoices, and asks for confirmation. (jurisdiction: United States, entity_scope: QuickBooks Desktop users editing a payment that has been applied to invoices, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026, conditions: the payment has already been used to pay invoices)

“This payment has been used to pay Invoices. Changing it will alter the way it is applied to those Invoices. Do you want to change it anyway?”

Not established from an authoritative source.

The correction for each error class — and why it does not book the revenue twice

See For services sold on credit, the seller normally raises an invoice that credits the sales account and debits accounts receivable; when the customer later pays that invoice, the seller would debit cash and credit accounts receivable — so the customer receipt is recorded against the receivable, not against sales a second time.

In the article's example, the invoicing entry itself both increases the accounts receivable asset shown in the balance sheet and increases sales shown in the income statement — the revenue is already in the income statement at invoicing. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: example entity 'ABC International' billing a customer $10,000 for services on credit, accounting_basis: accrual basis, conditions: stated as an illustrative example, not as a requirement)

“This journal entry increases the accounts receivable asset for ABC, which appears as a short-term asset in its balance sheet . In addition, it increases sales, which appear in ABC's income statement .”

A credit memo may also be issued to correct billing errors on an invoice, such as overcharges or incorrect quantities (examples, not a closed list). (jurisdiction: Not stated in the document; general commercial practice described by a US-based publisher (AccountingTools, Inc.), entity_scope: Sellers correcting their own issued invoices, conditions: a billing error exists on an already-issued invoice)

“It may also be issued to correct billing errors, such as overcharges or incorrect quantities on an invoice.”

The seller records a credit memo as a reduction of its accounts receivable balance, and the buyer records it as a reduction of its accounts payable balance. (jurisdiction: Not stated in the document; general commercial practice described by a US-based publisher (AccountingTools, Inc.), entity_scope: Seller and buyer to the credit memo, accounting_basis: accrual bookkeeping (accounts receivable / accounts payable balances))

“The seller records the credit memo as a reduction of its accounts receivable balance, while the buyer records it as a reduction in its accounts payable balance.”

An existing unapplied payment is applied to an open invoice by checking that invoice's box under the Outstanding Transactions section of the open payment transaction. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, conditions: the payment matches an open invoice)

“Under Outstanding Transactions , check the box for the correct open invoice.”

Where an unapplied payment has no matching open invoice, the user needs to create the transaction (the invoice) before the payment can be applied. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, conditions: the payment does not match an open invoice)

“If the payment doesn’t match an open invoice, you’ll need to create the transaction. Follow these steps:”

A deposit posted to an income account (or another type of account) is corrected by replacing that account in the From Account column with the Accounts Receivable account used on the original invoice. (jurisdiction: United States, entity_scope: QuickBooks Desktop users whose customer deposit was posted to income or another account rather than Accounts Receivable, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“In the From Account column, replace the income or another type of account with the Accounts Receivable account used on the original invoice.”

An existing customer credit is applied to the chosen invoice through the Discounts and Credits button by checkmarking the credit amount to apply. (jurisdiction: United States, entity_scope: QuickBooks Desktop users in the Customer Payment window, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“Select Discounts and Credits then place a checkmark beside the credit amount you want to apply.”

In the Customer Payment window the user removes the checkmark(s) against the invoice(s) the payment should not have been applied to. (jurisdiction: United States, entity_scope: QuickBooks Desktop users correcting a misapplied payment, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“On the Customer Payment window, remove the checkmark(s) from the invoice(s) that the payment shouldn't have been applied to.”

Saving the edited payment applies it to the newly selected invoice(s) and removes it from the invoice it was originally applied to. (jurisdiction: United States, entity_scope: QuickBooks Desktop users who followed the re-application steps, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026, conditions: the checkmarks were changed and the payment saved with Save & New)

“This will apply the payment to the invoice(s) you selected and remove it from the original invoice it was applied to.”

In QuickBooks Desktop for Mac, a payment applied to the wrong invoice can be corrected by editing the payment transaction. (jurisdiction: United States, entity_scope: QuickBooks Desktop for Mac users, platform: QuickBooks Desktop for Mac, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026)

“If you apply a payment on a wrong invoice, you can edit the payment transaction to correct it.”

Partly established. Established: applying an existing unapplied receipt or credit to the open invoice (S29, S32); correcting a receipt that was taken to income (S31); why each correction settles the invoice without recognising the same revenue twice (S04, S26). Missing: dealing with a duplicated invoice.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.

Correcting a receipt taken to income, banked without being applied, or applied to the wrong record — and applying a credit that is already sitting there

See For services sold on credit, the seller normally raises an invoice that credits the sales account and debits accounts receivable; when the customer later pays that invoice, the seller would debit cash and credit accounts receivable — so the customer receipt is recorded against the receivable, not against sales a second time.

See In the article's example, the invoicing entry itself both increases the accounts receivable asset shown in the balance sheet and increases sales shown in the income statement — the revenue is already in the income statement at invoicing.

See The seller records a credit memo as a reduction of its accounts receivable balance, and the buyer records it as a reduction of its accounts payable balance.

The seller should review its open credit memos at the end of each reporting period to see whether they can be linked to open accounts receivable. (jurisdiction: Not stated in the document; general commercial practice described by a US-based publisher (AccountingTools, Inc.), entity_scope: Sellers holding open credit memos, conditions: at the end of each reporting period)

“The seller should always review its open credit memos at the end of each reporting period to see if they can be linked to open accounts receivable.”

See An existing unapplied payment is applied to an open invoice by checking that invoice's box under the Outstanding Transactions section of the open payment transaction.

See A deposit posted to an income account (or another type of account) is corrected by replacing that account in the From Account column with the Accounts Receivable account used on the original invoice.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.

Never erase revenue that was genuinely earned

See For services sold on credit, the seller normally raises an invoice that credits the sales account and debits accounts receivable; when the customer later pays that invoice, the seller would debit cash and credit accounts receivable — so the customer receipt is recorded against the receivable, not against sales a second time.

See In the article's example, the invoicing entry itself both increases the accounts receivable asset shown in the balance sheet and increases sales shown in the income statement — the revenue is already in the income statement at invoicing.

See A credit memo may also be issued to correct billing errors on an invoice, such as overcharges or incorrect quantities (examples, not a closed list).

In the article's illustrative example, before the correction is made the controller reviews the transaction and confirms that the amount was earned and should have been recognized in the earlier interim period; this is presented as an example, not as a stated requirement. (jurisdiction: United States, entity_scope: Illustrative company preparing Q3 quarterly financial statements, accounting_basis: US GAAP, conditions: illustrative example only)

“The controller reviews the transaction and confirms that the $100,000 was earned and should have been recognized in Q2.”

Not established from an authoritative source.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.

Reversing an invoice that was recorded twice, without losing a real sale

See In the article's example, the invoicing entry itself both increases the accounts receivable asset shown in the balance sheet and increases sales shown in the income statement — the revenue is already in the income statement at invoicing.

See A credit memo may also be issued to correct billing errors on an invoice, such as overcharges or incorrect quantities (examples, not a closed list).

See The seller records a credit memo as a reduction of its accounts receivable balance, and the buyer records it as a reduction of its accounts payable balance.

See In the article's illustrative example, before the correction is made the controller reviews the transaction and confirms that the amount was earned and should have been recognized in the earlier interim period; this is presented as an example, not as a stated requirement.

Not established from an authoritative source.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.

When the error reaches a period you have already closed or already reported

Because these steps may change how accounts are affected, the user should check with their accountant before following them, particularly where the payment was originally deposited in a closed period. (jurisdiction: United States, entity_scope: QuickBooks Desktop users editing an existing deposit, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026, conditions: heightened where the payment was originally deposited in a closed period)

“As this may change how accounts are affected, you should check with your accountant before following these steps, particularly if the payment was originally deposited in a closed period”

The Statement defines an error in previously issued financial statements as an error in recognition, measurement, presentation or disclosure resulting from mathematical mistakes, mistakes in applying GAAP, or oversight or misuse of facts that existed at the time the financial statements were prepared. (jurisdiction: United States, entity_scope: business enterprises and not-for-profit organizations applying this Statement, accounting_basis: U.S. GAAP, effective_from: fiscal years beginning after December 15, 2005, conditions: definition as used in this Statement; the facts must have existed at the time the financial statements were prepared)

“Error in previously issued financial statements—an error in recognition, measurement, presentation, or disclosure in financial statements resulting from mathematical mistakes, mistakes in the application of GAAP, or oversight or misuse of facts that existed at the time the financial statements were prepared.”

An error in the financial statements of a prior period that is discovered after those statements were issued must be reported as a prior-period adjustment by restating the prior-period financial statements. (jurisdiction: United States, entity_scope: business enterprises and not-for-profit organizations applying this Statement, accounting_basis: U.S. GAAP, effective_from: fiscal years beginning after December 15, 2005, conditions: the error is in a prior period's financial statements and is discovered after those statements were issued; provisions need not be applied to immaterial items)

“Any error in the financial statements of a prior period discovered subsequent to their issuance shall be reported as a prior-period adjustment by restating the priorperiod financial statements.”

In the article's illustrative example, management determines both that the error is material to the earlier interim period and that correcting it in the current interim period will not mislead users of the financial statements; this is presented as an example, not as a stated requirement. (jurisdiction: United States, entity_scope: Illustrative company preparing Q3 quarterly financial statements, accounting_basis: US GAAP, conditions: illustrative example only)

“Management determines that the error is material to Q2's financial statements, but correcting it in Q3 will not mislead users of the financial statements.”

The provisions of the Statement need not be applied to immaterial items. (jurisdiction: United States, entity_scope: business enterprises and not-for-profit organizations applying this Statement, accounting_basis: U.S. GAAP, effective_from: fiscal years beginning after December 15, 2005, conditions: applies to immaterial items only)

“The provisions of this Statement need not be applied to immaterial items.”

Partly established. Established: what the user must check before posting in the closed or already reported case (S42). Missing: the distinction between a correction that falls wholly within the current open period and one that reaches a period already closed or already reported.

What changes once the period has been closed or the statements issued

See The Statement defines an error in previously issued financial statements as an error in recognition, measurement, presentation or disclosure resulting from mathematical mistakes, mistakes in applying GAAP, or oversight or misuse of facts that existed at the time the financial statements were prepared.

The Statement defines restatement as the process of revising previously issued financial statements to reflect the correction of an error in those statements. (jurisdiction: United States, entity_scope: business enterprises and not-for-profit organizations applying this Statement, accounting_basis: U.S. GAAP, effective_from: fiscal years beginning after December 15, 2005, conditions: definition as used in this Statement)

“Restatement—the process of revising previously issued financial statements to reflect the correction of an error in those financial statements.”

See An error in the financial statements of a prior period that is discovered after those statements were issued must be reported as a prior-period adjustment by restating the prior-period financial statements.

When financial statements are restated to correct an error, the entity must disclose that its previously issued financial statements have been restated and must describe the nature of the error. (jurisdiction: United States, entity_scope: business enterprises and not-for-profit organizations applying this Statement, accounting_basis: U.S. GAAP, effective_from: fiscal years beginning after December 15, 2005, conditions: applies when financial statements are restated to correct an error)

“26. When financial statements are restated to correct an error, the entity shall disclose that its previously issued financial statements have been restated, along with a description of the nature of the error. The entity also shall disclose the following:”

See The provisions of the Statement need not be applied to immaterial items.

See In the article's illustrative example, management determines both that the error is material to the earlier interim period and that correcting it in the current interim period will not mislead users of the financial statements; this is presented as an example, not as a stated requirement.

In the article's illustrative example, the company also includes a note disclosure in the current interim financial statements describing the nature of the error, its impact, and the correction made; this is presented as an example, not as a stated requirement. (jurisdiction: United States, entity_scope: Illustrative company preparing Q3 quarterly financial statements, accounting_basis: US GAAP, conditions: illustrative example only)

“The company also includes a disclosure in the notes to its Q3 financial statements, describing the nature of the error, its impact, and the correction made.”

Fix it with a correcting record, not by editing or deleting the original

A correcting entry is defined as a journal entry made to fix an erroneous transaction that had previously been recorded in the general ledger. (jurisdiction: United States (US accounting CPE publisher, whose site carries State CPE Requirements); the article itself states no jurisdictional limit, entity_scope: general-ledger accounting generally; no entity type stated, conditions: definition only, not a requirement)

“A correcting entry is a journal entry that is made in order to fix an erroneous transaction that had previously been recorded in the general ledger .”

In the worked example, making the correcting entry alters the original entry only in effect: the combined result is as though the original entry had been recorded correctly from the start, the correction being achieved by a further entry rather than by changing the original record. (jurisdiction: United States (US accounting CPE publisher, whose site carries State CPE Requirements); the article itself states no jurisdictional limit, entity_scope: single worked example of a misposted supplier invoice; no entity type stated, conditions: illustrative example; the article does not state a prohibition on editing original records)

“By making the correcting entry, Finnegan has, in effect, altered his original entry, as though it had initially (and correctly) been entered as follows:”

In the worked example, the party who misposted an expense corrects it by creating a correcting entry that moves the expense to the correct account. (jurisdiction: United States (US accounting CPE publisher, whose site carries State CPE Requirements); the article itself states no jurisdictional limit, entity_scope: single worked example of a misposted supplier invoice; no entity type stated, conditions: illustrative example, not a requirement)

“He realizes his mistake and subsequently creates a correcting entry to move the expense to the correct account.”

The article states it is especially important to fully document a correcting entry, because such items are particularly difficult to understand later, and that this means attaching to each journal entry documentation of the original error together with notes on how the correcting entry is intended to fix that error. (jurisdiction: United States (US accounting CPE publisher, whose site carries State CPE Requirements); the article itself states no jurisdictional limit, entity_scope: general-ledger accounting generally; no entity type stated, conditions: stated as a best practice; the article names these two documentation elements and does not state the list is complete; the article does not state a reason code, date, preparer name or link identifier beyond the above)

“It is especially important to fully document a correcting entry, since these items are particularly difficult to understand after some time has passed. This means attaching to each journal entry documentation of the original error, as well as notes regarding how the correcting entry is intended to fix the original error.”

Partly established. Established: corrections made through records that show what was changed and why (S48). Missing: not editing or deleting the original invoice or receipt; what that trail is needed for in this particular class of error.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.

What the correcting-record trail preserves

See A correcting entry is defined as a journal entry made to fix an erroneous transaction that had previously been recorded in the general ledger.

See In the worked example, making the correcting entry alters the original entry only in effect: the combined result is as though the original entry had been recorded correctly from the start, the correction being achieved by a further entry rather than by changing the original record.

See The article states it is especially important to fully document a correcting entry, because such items are particularly difficult to understand later, and that this means attaching to each journal entry documentation of the original error together with notes on how the correcting entry is intended to fix that error.

See In the worked example, the party who misposted an expense corrects it by creating a correcting entry that moves the expense to the correct account.

Partly established. Established: the expectation that accounting corrections are made through traceable correcting records (S47, S48, S49); what that trail preserves (S48). Missing: corrections not made by altering or deleting original records.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.

Proving the fix worked

The point of the matching process is that it proves the general ledger figure for receivables is justified. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities that carry an accounts receivable total in a general ledger)

“This matching process is important, because it proves that the general ledger figure for receivables is justified.”

The totals on the aged accounts receivable report are compared to the receivable total in the general ledger. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities reconciling an aged accounts receivable report to the general ledger, conditions: report run as of the final day of the reporting period)

“The totals on this report are then compared to the receivable total in the general ledger.”

Because the accounts receivable aging report itemizes all receivables in the accounting system, its total should match the ending balance in the accounts receivable general ledger account, and the accounting staff should reconcile the two as part of the period-end closing process. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: accounting staff of entities maintaining an accounts receivable aging report and an accounts receivable general ledger account, accounting_basis: accrual basis, conditions: reconciliation stated as part of the period-end closing process)

“The accounts receivable aging report itemizes all receivables in the accounting system , so its total should match the ending balance in the accounts receivable general ledger account . The accounting staff should reconcile the two as part of the period-end closing process.”

Where the aging report total and the accounts receivable general ledger balance differ, the difference is likely to be a journal entry posted against the general ledger account instead of being recorded as a formal credit memo or debit memo that would appear in the aging report. (jurisdiction: United States (US-oriented professional accounting reference; the article itself names no jurisdiction), entity_scope: entities reconciling the accounts receivable aging report to the general ledger account, accounting_basis: accrual basis, conditions: stated as a likely cause, not the only possible cause)

“If there is a difference between the report total and the general ledger balance, the difference is likely to be a journal entry that was made against the general ledger account, instead of being recorded as a formal credit memo or debit memo that would appear in the aging report.”

Once all unapplied payments have been applied, a re-run Profit and Loss report should no longer carry the Unapplied cash payment income account — the article's stated confirmation that the payments are now applied. (jurisdiction: United States (QuickBooks Online US / en-US help edition), entity_scope: QuickBooks Online users on the products listed by the article, platform: QuickBooks Online, platform_edition: US edition; article updated 8/4/2026, accounting_basis: cash, conditions: all unapplied payments have been applied)

“After applying all unapplied payments, run your Profit and Loss report again. The Unapplied cash payment income account should no longer be on the report.”

The steps given in this section re-apply payments to the correct invoices without affecting the user's reconciliation. (jurisdiction: United States, entity_scope: QuickBooks Desktop users following the steps in this section, platform: QuickBooks Desktop, platform_edition: en-US QuickBooks Support help article, updated 8/3/2026, conditions: the steps listed in this section are performed)

“Performing the following steps will re-apply payments to the correct invoices without affecting your reconciliation.”

Partly established. Established: the open-invoice listing moves consistently and agrees afterwards (S06, S51, S52, S56); the receivables balance in the ledger moves consistently and agrees afterwards (S06, S50, S51, S52, S56). Missing: the customer's account balance moves consistently and agrees afterwards.

Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: high quality professional secondary reference.

The receivables reconciliation that closes the loop

Reconciling accounts receivable means matching the detailed amounts of unpaid customer billings against the accounts receivable total stated in the general ledger. (jurisdiction: US (AccountingTools is a US accounting publisher; the article itself cites no jurisdiction-specific rules), entity_scope: entities that carry an accounts receivable total in a general ledger and hold detail of unpaid customer billings)

“The reconciliation of accounts receivable is the process of matching the detailed amounts of unpaid customer billings to the accounts receivable total stated in the general ledger .”

See The detailed listing of unpaid customer billings is usually held in a subsidiary sales ledger, and that listing should match the ending balance in the general ledger.

See The point of the matching process is that it proves the general ledger figure for receivables is justified.

See Because the accounts receivable aging report itemizes all receivables in the accounting system, its total should match the ending balance in the accounts receivable general ledger account, and the accounting staff should reconcile the two as part of the period-end closing process.

Partly established. Established: the open-invoice listing moves consistently and agrees once the correction is posted (S06, S51, S52, S56); the receivables control balance in the general ledger moves consistently and agrees once the correction is posted (S06, S50, S51, S52, S56). Missing: the individual customer's account balance moves consistently and agrees once the correction is posted.

Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.