# What is a clearing account, and why do balances get stuck in one and never clear?
- **[United States (US publisher of CPE/accounting reference material); the definition is stated as general double-entry bookkeeping, with no jurisdiction-specific rule · general businesses keeping a general ledger · double-entry general ledger accounting]** A clearing account is defined as a general ledger account used to temporarily aggregate amounts being transferred from other temporary accounts. → [CG-MCE-026#S01](#s-CG-MCE-026-S01)
- **[United States (US publisher); described as general bookkeeping practice, not a jurisdiction-specific rule · businesses with bank timing differences on receipts and disbursements · double-entry general ledger accounting]** A cash clearing account records incoming and outgoing cash transactions not yet fully reconciled and acts as an intermediate holding place where receipts and disbursements have timing differences with bank postings; once the bank confirms the transactions, the entries are moved out of the clearing account to the correct final accounts. → [CG-MCE-026#S05](#s-CG-MCE-026-S05)
- **[United States (US publisher); described as general bookkeeping practice · businesses receiving goods ahead of supplier invoices · double-entry general ledger accounting, accrual]** A GR/IR clearing account is used where goods are received but the supplier's invoice has not yet arrived, allowing the inventory acquisition to be recorded while the payable is not yet recognised; the account is zeroed out once the invoice is received and matched to the goods receipt — i.e. the balance persists until the matching second leg arrives. → [CG-MCE-026#S06](#s-CG-MCE-026-S06)
## What this page establishes
- The bookkeeping definition, and how a balance comes to sit there — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- The clearing-type accounts the software sets up, and what routinely posts through them — Not established
- What the software lets you do to an entry already posted, and what a locked period changes — Not established
- How a balance standing at the reporting date is judged — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- What each correction route does to the original period and the period it lands in — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Who reviews it, how often, and the state it should be in at period end — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- What a clearing account is, and the behaviour that defines it — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Not a suspense account, and not an ordinary balance-sheet account — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Spotting the accounts in your own file that are acting as clearing accounts — Not established (Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation.)
- Why a balance sticks: one half of a pair without the other — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Reading the account's detail so the balance breaks into individual items — Established
- Clearing each shape: repair the entry, re-point it, or post a further entry — Not established (Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Telling a balance genuinely in transit from one that is stuck — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- The routine that keeps the account coming back to nil — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- What an uncleared balance does to the financial statements — Not established
## What a clearing account is, and the behaviour that defines it
- A clearing account is defined as a general ledger account used to temporarily aggregate amounts being transferred from other temporary accounts. _(jurisdiction: United States (US publisher of CPE/accounting reference material); the definition is stated as general double-entry bookkeeping, with no jurisdiction-specific rule, entity_scope: general businesses keeping a general ledger, accounting_basis: double-entry general ledger accounting, conditions: stated in the closing-the-books context of the article)_ `CG-MCE-026#S01`
> “A clearing account is a general ledger account that is used to temporarily aggregate the amounts being transferred from other temporary accounts .” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "What is a Clearing Account in Closing the Books?", first sentence. Verified 2026-09-09.
- A clearing account may be used to hold transactions for a short period of time (permissive, not required). _(jurisdiction: United States (US publisher); general bookkeeping description, entity_scope: general businesses, day-to-day accounting, accounting_basis: double-entry general ledger accounting)_ `CG-MCE-026#S02`
> “A clearing account may be used to hold transactions for a short period of time.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "What is a Clearing Accounting in Day-to-Day Accounting?", first sentence. Verified 2026-09-09.
- The article gives the income summary account as its best example of a clearing account: ending balances of revenue and expense accounts are transferred into it at fiscal year end, and the aggregate balance is then shifted to retained earnings — an illustration of a clearing account being emptied, not a requirement. _(jurisdiction: United States (US publisher); stated as general bookkeeping practice, no jurisdiction-specific rule, entity_scope: general businesses performing year-end closing, accounting_basis: double-entry general ledger accounting, conditions: presented as an example; year-end closing procedure only)_ `CG-MCE-026#S03`
> “The best example is the income summary account , to which the ending balances of all revenue and expense accounts are transferred at the end of a fiscal year before the aggregate balance is shifted to retained earnings .” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "What is a Clearing Account in Closing the Books?", second sentence. Verified 2026-09-09.
- The article states there are several applications for clearing accounts within the typical business and that the types it then lists are only several of them — the list is presented as open, not exhaustive. _(jurisdiction: United States (US publisher); general bookkeeping description, entity_scope: the typical business, accounting_basis: double-entry general ledger accounting, conditions: list is illustrative, not closed)_ `CG-MCE-026#S04`
> “There are several applications for clearing accounts within the typical business. Several types of clearing accounts are noted below:” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "Types of Clearing Accounts", introductory sentences. Verified 2026-09-09.
_Partly established. Established: the clearing account defined by function (S01); the clearing account defined by expected behaviour (S01, S03, S05, S06). Missing: its defining property is that it returns to nil rather than that it holds any particular kind of transaction._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## The bookkeeping definition, and how a balance comes to sit there
- See above: A clearing account is defined as a general ledger account used to temporarily aggregate amounts being transferred from other temporary accounts. ([CG-MCE-026#S01](#s-CG-MCE-026-S01))
- A cash clearing account records incoming and outgoing cash transactions not yet fully reconciled and acts as an intermediate holding place where receipts and disbursements have timing differences with bank postings; once the bank confirms the transactions, the entries are moved out of the clearing account to the correct final accounts. _(jurisdiction: United States (US publisher); described as general bookkeeping practice, not a jurisdiction-specific rule, entity_scope: businesses with bank timing differences on receipts and disbursements, accounting_basis: double-entry general ledger accounting, conditions: applies to cash transactions not yet fully reconciled)_ `CG-MCE-026#S05`
> “A cash clearing account records incoming and outgoing cash transactions that are not yet fully reconciled. It acts as an intermediate holding place when receipts and disbursements have timing differences with bank postings. Once the bank confirms the transactions, entries are moved from the clearing account to the correct final accounts.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "Types of Clearing Accounts", bullet "Cash clearing account". Verified 2026-09-09.
- A GR/IR clearing account is used where goods are received but the supplier's invoice has not yet arrived, allowing the inventory acquisition to be recorded while the payable is not yet recognised; the account is zeroed out once the invoice is received and matched to the goods receipt — i.e. the balance persists until the matching second leg arrives. _(jurisdiction: United States (US publisher); described as general bookkeeping practice, entity_scope: businesses receiving goods ahead of supplier invoices, accounting_basis: double-entry general ledger accounting, accrual, conditions: applies where goods receipt precedes invoice receipt)_ `CG-MCE-026#S06`
> “A GR/IR clearing account is used when goods are received but the supplier's invoice has not yet arrived. This allows businesses to record inventory acquisition while still waiting to recognize the accounts payable liability. Once the invoice is received and matched to the goods receipt, the clearing account is zeroed out.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "Types of Clearing Accounts", bullet "Goods receipt/invoice receipt (GR/IR) clearing account". Verified 2026-09-09.
_Partly established. Established: the accepted definition of a clearing account in double-entry bookkeeping (S01); the intended behaviour of a clearing account (S01, S02, S05, S06, S11, S18); a balance persisting from a recorded event whose matching leg is absent (S06). Missing: how a clearing account differs from a suspense account holding unidentified items, by what each holds and what is expected to empty it; how a clearing account differs from an ordinary permanent balance-sheet account, by what each holds and what is expected to empty it; the characteristics by which an account is recognised as acting as a clearing account whatever it is named; a balance persisting from a matching leg recorded at a different amount; a balance persisting from a matching leg posted to another account; a balance persisting from a recorded event duplicated through a second route._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Not a suspense account, and not an ordinary balance-sheet account
- Clearing accounts are part of normal processing, while suspense accounts signal exceptions requiring investigation. _(jurisdiction: United States (US publisher); stated as general bookkeeping practice, entity_scope: general businesses, accounting_basis: double-entry general ledger accounting)_ `CG-MCE-026#S08`
> “Clearing accounts are part of normal processing, while suspense accounts signal exceptions requiring investigation.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "FAQs" — question "How do clearing accounts differ from suspense accounts?", final sentence. Verified 2026-09-09.
- A suspense account is defined as an account used to store transactions temporarily while there is uncertainty about where those transactions should be recorded. _(jurisdiction: Not stated in the document; US-based professional accounting publisher (AccountingTools, US state CPE requirements), entity_scope: Not limited by the document; general bookkeeping usage by an entity's accounting staff, accounting_basis: Double-entry bookkeeping (accrual examples used); not otherwise stated, conditions: definition only, not a recognition or measurement requirement)_ `CG-MCE-026#S09`
> “A suspense account is an account used to temporarily store transactions for which there is uncertainty about where they should be recorded.” — [AccountingTools, Inc. (author Steven Bragg) — Suspense account definition](https://www.accountingtools.com/articles/what-is-a-suspense-account.html), 2026-05-16; Section heading "What is a Suspense Account?", first sentence. Verified 2026-09-09.
- The described normal behaviour is that once accounting staff investigate and clarify the purpose of the transaction, the transaction is shifted out of the suspense account into the correct account or accounts - i.e. the parking is temporary and is ended by identification. _(jurisdiction: Not stated in the document; US-based professional accounting publisher (AccountingTools, US state CPE requirements), entity_scope: Not limited by the document; accounting staff of an entity using a suspense account, accounting_basis: Double-entry bookkeeping; not otherwise stated, conditions: applies once the purpose of the transaction has been investigated and clarified)_ `CG-MCE-026#S10`
> “Once the accounting staff investigates and clarifies the purpose of this type of transaction, it shifts the transaction out of the suspense account and into the correct account(s).” — [AccountingTools, Inc. (author Steven Bragg) — Suspense account definition](https://www.accountingtools.com/articles/what-is-a-suspense-account.html), 2026-05-16; Section "What is a Suspense Account?", second sentence. Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Spotting the accounts in your own file that are acting as clearing accounts
- A payroll clearing account temporarily holds amounts for wages, taxes and deductions before disbursement: the total payroll is transferred in after processing and then paid out to employees and tax agencies, so that payroll entries in the general ledger match cash outflows. _(jurisdiction: United States (US publisher; "tax agencies" in the accompanying example); described as general practice, entity_scope: employers running payroll, accounting_basis: double-entry general ledger accounting)_ `CG-MCE-026#S11`
> “A payroll clearing account temporarily holds funds meant for employee wages, taxes, and deductions before payments are disbursed. After payroll processing, the total payroll amount is transferred into this account and then used to pay employees and remit taxes. It ensures that payroll entries in the general ledger match cash outflows.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "Types of Clearing Accounts", bullet "Payroll clearing account". Verified 2026-09-09.
- QuickBooks describes the Undeposited Funds account as acting like a temporary lockbox or drawer that keeps payments in it until the user records a formal bank deposit. _(jurisdiction: United States (en-US QuickBooks Support article), entity_scope: QuickBooks small-business users, platform: QuickBooks, platform_edition: QuickBooks Online Plus, Simple Start, Essentials, Solopreneur Plus; QuickBooks Desktop referenced in related links)_ `CG-MCE-026#S12`
> “An Undeposited Funds account acts as a temporary lockbox (or drawer) to keep your payments in until you record a formal bank deposit.” — [Intuit Inc. — Managing your Undeposited Funds account](https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US), 2026-08-03; What is an Undeposited Funds account in QuickBooks?. Verified 2026-09-09.
- In QuickBooks, the Undeposited Funds account holds invoice payments and sales receipts that the user wants to combine before taking them to the bank. _(jurisdiction: United States (en-US QuickBooks Support article, US pricing and US dollar examples), entity_scope: QuickBooks small-business users, platform: QuickBooks, platform_edition: QuickBooks Online Plus, Simple Start, Essentials, Solopreneur Plus; QuickBooks Desktop referenced in related links, conditions: applies to payments the user wants to combine before banking them)_ `CG-MCE-026#S13`
> “The Undeposited Funds account holds invoice payments and sales receipts you want to combine before taking them to the bank.” — [Intuit Inc. — Managing your Undeposited Funds account](https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US), 2026-08-03; Overview. Verified 2026-09-09.
- Zoho Books has an account named Undeposited Funds that appears under Cash in the From Account dropdown of a Deposit From Other Accounts transaction. _(jurisdiction: United States (Zoho Books US-EN knowledge base edition), entity_scope: Users of Zoho Books; chart of accounts as shown in the From Account dropdown, platform: Zoho Books, platform_edition: US (US-EN) knowledge base edition)_ `CG-MCE-026#S14`
> “Select the dropdown in the From Account field and select Undeposited Funds under Cash .” — [Zoho Corporation (Zoho Books US knowledge base) — How do I transfer payments from undeposited funds to my bank account in Zoho Books?](https://www.zoho.com/us/books/kb/banking/transfer-funds.html), Zoho Books US knowledge base, US-EN edition; FAQ topic 'Banking'; Section "Create a Transaction From Your Bank Account", step within "In the pane that appears". Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation._
## The clearing-type accounts the software sets up, and what routinely posts through them
- See above: In QuickBooks, the Undeposited Funds account holds invoice payments and sales receipts that the user wants to combine before taking them to the bank. ([CG-MCE-026#S13](#s-CG-MCE-026-S13))
- See above: Zoho Books has an account named Undeposited Funds that appears under Cash in the From Account dropdown of a Deposit From Other Accounts transaction. ([CG-MCE-026#S14](#s-CG-MCE-026-S14))
- The first step of the QuickBooks process is to send invoice payments and record sales receipts to the Undeposited Funds account. _(jurisdiction: United States (en-US QuickBooks Support article), entity_scope: QuickBooks small-business users, platform: QuickBooks, platform_edition: QuickBooks Online Plus, Simple Start, Essentials, Solopreneur Plus; QuickBooks Desktop referenced in related links, conditions: step listed under 'How it works')_ `CG-MCE-026#S15`
> “Sends invoice payments and record sales receipts to the Undeposited Funds account.” — [Intuit Inc. — Managing your Undeposited Funds account](https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US), 2026-08-03; How it works — first step. Verified 2026-09-09.
- QuickBooks states that use of the Undeposited Funds account is not needed where the user is downloading transactions directly from their bank. _(jurisdiction: United States (en-US QuickBooks Support article), entity_scope: QuickBooks users downloading transactions directly from their bank, platform: QuickBooks, platform_edition: QuickBooks Online Plus, Simple Start, Essentials, Solopreneur Plus; QuickBooks Desktop referenced in related links, conditions: applies only when transactions are downloaded directly from the bank)_ `CG-MCE-026#S16`
> “Bank downloads: You don’t need to use the Undeposited Funds account if you’re downloading transactions directly from your bank.” — [Intuit Inc. — Managing your Undeposited Funds account](https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US), 2026-08-03; Important notices — Bank downloads. Verified 2026-09-09.
- With the QuickBooks Payments service, payments can be processed, funds deposited and transactions recorded in the books automatically, without the user manually combining them. _(jurisdiction: United States (en-US QuickBooks Support article; US QuickBooks Payments rates), entity_scope: QuickBooks users who apply for and use QuickBooks Payments, platform: QuickBooks, platform_edition: QuickBooks Payments service alongside QuickBooks Online / Desktop, conditions: requires subscribing to the QuickBooks Payments service)_ `CG-MCE-026#S17`
> “QuickBooks Payments: Check out QuickBooks Payments rates and apply . With this service, you can automatically process payments, deposit funds, and record transactions in your books without manually combining them.” — [Intuit Inc. — Managing your Undeposited Funds account](https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US), 2026-08-03; Important notices — QuickBooks Payments. Verified 2026-09-09.
_Not established from an authoritative source._
## Why a balance sticks: one half of a pair without the other
- See above: A GR/IR clearing account is used where goods are received but the supplier's invoice has not yet arrived, allowing the inventory acquisition to be recorded while the payable is not yet recognised; the account is zeroed out once the invoice is received and matched to the goods receipt — i.e. the balance persists until the matching second leg arrives. ([CG-MCE-026#S06](#s-CG-MCE-026-S06))
- An intercompany clearing account temporarily records transactions between different legal entities in a corporate group and helps ensure due-to and due-from balances between the companies match before being finalised in each company's books. _(jurisdiction: United States (US publisher); described as general group-accounting practice, entity_scope: corporate groups with multiple legal entities, accounting_basis: double-entry general ledger accounting, conditions: hedged: "helps ensure", not guarantees)_ `CG-MCE-026#S18`
> “An intercompany clearing account temporarily records transactions between different legal entities within a corporate group. It helps ensure that due-to and due-from balances between companies match before they are finalized in each company's books.” — [AccountingTools, Inc. (author Steven Bragg) — Clearing account definition](https://www.accountingtools.com/articles/clearing-account), 2026-01-22; Section heading: "Types of Clearing Accounts", bullet "Intercompany clearing account". Verified 2026-09-09.
_Partly established. Established: the mechanism of a stuck balance as a broken pair (S06); a missing second leg (S06). Missing: mismatched amounts; a second leg posted elsewhere; the same event recorded twice by different routes._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Reading the account's detail so the balance breaks into individual items
- To get a view of debits and credits per transaction, the article directs the user to start from the Transaction Detail by Account report and then customise it to add the appropriate columns. _(jurisdiction: United States (en-US QuickBooks Online help edition), entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: Article's listed QuickBooks Online products, as at 3 August 2026, effective_from: 2026-08-03, conditions: to achieve this specific view)_ `CG-MCE-026#S19`
> “To achieve this specific view, start with the Transaction Detail by Account report and then customize it to add the appropriate columns.” — [Intuit Inc. — Run a ledger report that shows debits and credits for each transaction](https://quickbooks.intuit.com/learn-support/en-us/help-article/profit-loss-reports/create-report-shows-debits-credits-transaction/L1zvqNX0e_US_en_US), 2026-08-03; Article body, introduction (second paragraph). Verified 2026-09-09.
- The general ledger report is found by searching for and selecting General Ledger in the 'Find report by name' dropdown. _(jurisdiction: United States (en-US QuickBooks Online help edition), entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: Article's listed QuickBooks Online products, as at 3 August 2026, effective_from: 2026-08-03)_ `CG-MCE-026#S20`
> “In the Find report by name dropdown, search for and select General Ledger .” — [Intuit Inc. — Run a ledger report that shows debits and credits for each transaction](https://quickbooks.intuit.com/learn-support/en-us/help-article/profit-loss-reports/create-report-shows-debits-credits-transaction/L1zvqNX0e_US_en_US), 2026-08-03; Section 'How to run a general ledger report', step 2. Verified 2026-09-09.
- In the General Ledger report, selecting Columns and then the Credit and Debit checkboxes adds Credit and Debit columns to the report. _(jurisdiction: United States (en-US QuickBooks Online help edition), entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: Article's listed QuickBooks Online products, as at 3 August 2026, effective_from: 2026-08-03, conditions: within the General Ledger report)_ `CG-MCE-026#S21`
> “Select Columns , then select the Credit and Debit checkboxes to add these columns.” — [Intuit Inc. — Run a ledger report that shows debits and credits for each transaction](https://quickbooks.intuit.com/learn-support/en-us/help-article/profit-loss-reports/create-report-shows-debits-credits-transaction/L1zvqNX0e_US_en_US), 2026-08-03; Section 'How to run a general ledger report', step 3. Verified 2026-09-09.
- Selecting the Cleared checkbox in the report's columns shows the current reconciliation status for each transaction. _(jurisdiction: United States (en-US QuickBooks Online help edition), entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: Article's listed QuickBooks Online products, as at 3 August 2026, effective_from: 2026-08-03, conditions: to show the current reconciliation status for each transaction)_ `CG-MCE-026#S22`
> “To show the current reconciliation status for each transaction, select the Cleared checkbox.” — [Intuit Inc. — Run a ledger report that shows debits and credits for each transaction](https://quickbooks.intuit.com/learn-support/en-us/help-article/profit-loss-reports/create-report-shows-debits-credits-transaction/L1zvqNX0e_US_en_US), 2026-08-03; Section 'How to run a general ledger report', step 4. Verified 2026-09-09.
## What the software lets you do to an entry already posted, and what a locked period changes
- Restricting the report to a chosen account is done by selecting Filter. _(jurisdiction: United States (en-US QuickBooks Online help edition), entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: Article's listed QuickBooks Online products, as at 3 August 2026, effective_from: 2026-08-03, conditions: to select an account you want in the report)_ `CG-MCE-026#S24`
> “To select an account that you want to have in your report, select Filter .” — [Intuit Inc. — Run a ledger report that shows debits and credits for each transaction](https://quickbooks.intuit.com/learn-support/en-us/help-article/profit-loss-reports/create-report-shows-debits-credits-transaction/L1zvqNX0e_US_en_US), 2026-08-03; Section 'How to run a general ledger report', step 5. Verified 2026-09-09.
- From the selected transaction in QuickBooks Online, the user opens the Transaction journal by selecting More and then Transaction journal from the pop-up menu. _(jurisdiction: United States (QuickBooks US en-US support article), entity_scope: QuickBooks Online users, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus; updated 8/5/2026, effective_from: 2026-08-05 (last updated), conditions: reached from a transaction selected in the Transaction List by Date report)_ `CG-MCE-026#S25`
> “Select More , then select Transaction journal from the pop-up menu.” — [Intuit Inc. — Void a transaction from another period](https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/void-transaction-another-period/L2ffazA7V_US_en_US), 2026-08-05; Step 1: Void the transaction > "Print the transaction journal for reference". Verified 2026-09-09.
- In the described procedure, an already-recorded payment received is opened for amendment by clicking Edit on its Details page, so the platform permits editing a posted payment. _(jurisdiction: United States (Zoho Books US-EN knowledge base edition), entity_scope: Users of Zoho Books; Payments Received records under the Sales module, platform: Zoho Books, platform_edition: US (US-EN) knowledge base edition, conditions: as a step in the procedure the page describes; the page states no period, role or lock conditions)_ `CG-MCE-026#S26`
> “Click Edit on the top left corner of the payment’s Details page.” — [Zoho Corporation (Zoho Books US knowledge base) — How do I transfer payments from undeposited funds to my bank account in Zoho Books?](https://www.zoho.com/us/books/kb/banking/transfer-funds.html), Zoho Books US knowledge base, US-EN edition; FAQ topic 'Banking'; Section "Edit the Payment and Update the Deposit To Account", step beginning "Click Edit". Verified 2026-09-09.
- In QuickBooks Online, rather than removing a transaction, a user can record a reversing entry to void a transaction that falls in another period; because the original transaction is still on record, it can be restored. _(jurisdiction: United States (QuickBooks US en-US support article), entity_scope: QuickBooks Online users, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus; updated 8/5/2026, effective_from: 2026-08-05 (last updated), conditions: transaction lies in another period)_ `CG-MCE-026#S27`
> “Instead of removing the transaction, you can record a reversing entry to void a transaction in another period. You can restore the transaction without any problems since it's still on record.” — [Intuit Inc. — Void a transaction from another period](https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/void-transaction-another-period/L2ffazA7V_US_en_US), 2026-08-05; Intro paragraph, before "Step 1: Void the transaction". Verified 2026-09-09.
_Not established from an authoritative source._
## Telling a balance genuinely in transit from one that is stuck
- See above: A cash clearing account records incoming and outgoing cash transactions not yet fully reconciled and acts as an intermediate holding place where receipts and disbursements have timing differences with bank postings; once the bank confirms the transactions, the entries are moved out of the clearing account to the correct final accounts. ([CG-MCE-026#S05](#s-CG-MCE-026-S05))
- Deposits in transit typically arise when deposits are made near the end of a reporting period; the article gives checks mailed to the bank but not yet cleared, and electronic transfers that take time to post, as non-exhaustive examples ('such as'). _(jurisdiction: Not stated in the document; general accounting usage as presented by a US-based publisher (AccountingTools CPE), entity_scope: General — a company making deposits near a period end, conditions: hedged as 'typically', not invariably; examples introduced by 'such as' — list is open)_ `CG-MCE-026#S29`
> “This typically happens when deposits are made near the end of a reporting period, such as checks mailed to the bank but not yet cleared or electronic transfers that take time to post.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "What is In Transit in Accounting?", third sentence. Verified 2026-09-09.
- In the article's illustrative example, a company records a customer check as a cash receipt and deposits it on July 31 while the bank does not record the check until the following day, August 1 — showing an in-transit item created by a one-day timing difference across a period end. This is an example, not a requirement. _(jurisdiction: Not stated in the document; illustrative example denominated in US dollars, entity_scope: Illustrative fictional company (Smith Corporation), conditions: illustrative example only)_ `CG-MCE-026#S30`
> “For example, on July 31, Smith Corporation receives a check from a customer in the amount of $1,000. It records the check as a cash receipt on the same day, and deposits the check at its bank at the end of the day. The bank does not record the check in its books until the following day, August 1.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "Example of In Transit", first three sentences. Verified 2026-09-09.
- Auditors also review receiving reports issued after period end to confirm whether goods were received shortly thereafter — i.e. the article describes checking post-period-end evidence that the matching leg of an in-transit item arrived. _(jurisdiction: Not stated in the document; general audit practice as described by a US-based publisher (AccountingTools CPE), entity_scope: Audits generally; described for goods in transit, conditions: described in an FAQ; no auditing standard cited; 'shortly thereafter' is not quantified in the document)_ `CG-MCE-026#S31`
> “Auditors also review receiving reports issued after period end to confirm whether goods were received shortly thereafter.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "FAQs", sub-question "How are in-transit items verified during an audit?", second sentence. Verified 2026-09-09.
_Partly established. Established: a way for the reader to tell which they are looking at (S31). Missing: a stuck balance distinguished from a legitimate balance that reflects money genuinely in transit at the reporting date._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## How a balance standing at the reporting date is judged
- See above: Deposits in transit typically arise when deposits are made near the end of a reporting period; the article gives checks mailed to the bank but not yet cleared, and electronic transfers that take time to post, as non-exhaustive examples ('such as'). ([CG-MCE-026#S29](#s-CG-MCE-026-S29))
- See above: Auditors also review receiving reports issued after period end to confirm whether goods were received shortly thereafter — i.e. the article describes checking post-period-end evidence that the matching leg of an in-transit item arrived. ([CG-MCE-026#S31](#s-CG-MCE-026-S31))
- For accounting purposes the article defines 'in transit' as describing transactions that have been initiated but are not yet fully processed or recorded in the recipient's accounts. _(jurisdiction: Not stated in the document; general accounting usage as presented by a US-based publisher (AccountingTools CPE, 'State CPE Requirements'), with the worked example denominated in US dollars, entity_scope: General — companies preparing accounting records; no entity type stated, conditions: definition only, as used in accounting)_ `CG-MCE-026#S32`
> “In accounting, the term "in transit" refers to transactions that have been initiated but not yet fully processed or recorded in the recipient’s accounts.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "What is In Transit in Accounting?", first sentence. Verified 2026-09-09.
- The article states that the described verification procedures help ensure proper cutoff and correct balance sheet classification; it claims assistance towards those outcomes, not that they guarantee them. _(jurisdiction: Not stated in the document; general audit practice as described by a US-based publisher (AccountingTools CPE), entity_scope: Audits generally; no entity type stated, conditions: hedged as 'help ensure'; refers back to the procedures listed in the same FAQ answer)_ `CG-MCE-026#S33`
> “These procedures help ensure proper cutoff and correct balance sheet classification.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "FAQs", sub-question "How are in-transit items verified during an audit?", third sentence. Verified 2026-09-09.
_Partly established. Established: the basis on which a balance standing at the reporting date is judged to represent money genuinely in transit whose matching leg is expected in the ordinary course rather than a residue whose matching leg will not arrive (S31). Missing: how a clearing-account balance is evaluated in a set of financial statements; what an uncleared balance signifies for the reliability of the balance sheet; what an uncleared balance signifies for the reliability of the close._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Clearing each shape: repair the entry, re-point it, or post a further entry
- See above: In QuickBooks Online, rather than removing a transaction, a user can record a reversing entry to void a transaction that falls in another period; because the original transaction is still on record, it can be restored. ([CG-MCE-026#S27](#s-CG-MCE-026-S27))
- As an alternative to a reclassifying correcting entry, the original entry could instead have been reversed and replaced by a new, correct entry; the article presents both routes as available for the misclassification it describes. _(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 of the article's own misclassified-expense example; presented as an alternative ('could have been'), not as the required route)_ `CG-MCE-026#S34`
> “Alternatively, the original entry could have been reversed and replaced by a new entry that correctly charges the expense to the depreciation account.” — [AccountingTools, Inc. (author Steven Bragg) — Correcting entry definition](https://www.accountingtools.com/articles/correcting-entry-definition-and-usage.html), 2025-12-26; Heading 'What is a Correcting Entry?', last sentence of the example. Verified 2026-09-09.
- As an alternative to amending the payment, the user can create a transaction in the bank account into which the undeposited funds are to be transferred. _(jurisdiction: United States (Zoho Books US-EN knowledge base edition), entity_scope: Users of Zoho Books, platform: Zoho Books, platform_edition: US (US-EN) knowledge base edition)_ `CG-MCE-026#S36`
> “You can create a transaction in the bank account to which you want to transfer the undeposoted funds.” — [Zoho Corporation (Zoho Books US knowledge base) — How do I transfer payments from undeposited funds to my bank account in Zoho Books?](https://www.zoho.com/us/books/kb/banking/transfer-funds.html), Zoho Books US knowledge base, US-EN edition; FAQ topic 'Banking'; Section "Create a Transaction From Your Bank Account", introductory sentence (page reads "undeposoted"). Verified 2026-09-09.
- The date entered in the Journal date field of the reversing journal entry is the date on which the transaction is shown as reversed. _(jurisdiction: United States (QuickBooks US en-US support article), entity_scope: QuickBooks Online users creating a journal entry, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus; updated 8/5/2026, effective_from: 2026-08-05 (last updated), conditions: creating the reversing journal entry via + Create > Journal Entry)_ `CG-MCE-026#S37`
> “In the Journal date field, enter the date you want to show the transaction as reversed.” — [Intuit Inc. — Void a transaction from another period](https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/void-transaction-another-period/L2ffazA7V_US_en_US), 2026-08-05; Step 1: Void the transaction > "Create a reversing Journal entry to void a transaction". Verified 2026-09-09.
- Attempts to change transactions dated on or before the lock date trigger whichever of the warning or password prompt was configured. _(jurisdiction: United States (QuickBooks Online US, en-us help article), entity_scope: QuickBooks Online company files, platform: QuickBooks Online, platform_edition: US (en-us) help article, updated 8/5/2026, conditions: response depends on the option set)_ `CG-MCE-026#S39`
> “Any attempt to change transactions dated on or before the lock date will trigger the warning or password prompt you set.” — [Intuit Inc. — Lock your books in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-online/L59LelyPM_US_en_US), 2026-08-05; Step 2: Lock your books, closing sentence after 'Select Save'. Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: high quality professional secondary reference, official platform documentation._
## What each correction route does to the original period and the period it lands in
- See above: In QuickBooks Online, rather than removing a transaction, a user can record a reversing entry to void a transaction that falls in another period; because the original transaction is still on record, it can be restored. ([CG-MCE-026#S27](#s-CG-MCE-026-S27))
- See above: As an alternative to a reclassifying correcting entry, the original entry could instead have been reversed and replaced by a new, correct entry; the article presents both routes as available for the misclassification it describes. ([CG-MCE-026#S34](#s-CG-MCE-026-S34))
- See above: The date entered in the Journal date field of the reversing journal entry is the date on which the transaction is shown as reversed. ([CG-MCE-026#S37](#s-CG-MCE-026-S37))
- The reversing journal entry is built by entering the accounts in reverse of those shown on the printed transaction journal of the original transaction. _(jurisdiction: United States (QuickBooks US en-US support article), entity_scope: QuickBooks Online users creating a journal entry, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus; updated 8/5/2026, effective_from: 2026-08-05 (last updated), conditions: transaction journal of the original transaction has been printed as reference)_ `CG-MCE-026#S38`
> “Enter the accounts in reverse based on the printed transaction journal.” — [Intuit Inc. — Void a transaction from another period](https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/void-transaction-another-period/L2ffazA7V_US_en_US), 2026-08-05; Step 1: Void the transaction > "Create a reversing Journal entry to void a transaction". Verified 2026-09-09.
- See above: Attempts to change transactions dated on or before the lock date trigger whichever of the warning or password prompt was configured. ([CG-MCE-026#S39](#s-CG-MCE-026-S39))
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._
## What an uncleared balance does to the financial statements
- See above: The article states that the described verification procedures help ensure proper cutoff and correct balance sheet classification; it claims assistance towards those outcomes, not that they guarantee them. ([CG-MCE-026#S33](#s-CG-MCE-026-S33))
- The article states that in-transit transactions are carefully monitored, with the stated purposes of accurate financial reporting and of preventing discrepancies between internal records and external statements; it is a description of practice, not a stated requirement. _(jurisdiction: Not stated in the document; general accounting usage as presented by a US-based publisher (AccountingTools CPE), entity_scope: General — no entity type stated, conditions: descriptive statement of practice; no monitoring frequency, threshold or procedure specified)_ `CG-MCE-026#S40`
> “These transactions are carefully monitored to ensure accurate financial reporting and prevent discrepancies between internal records and external statements.” — [AccountingTools, Inc. (author Steven Bragg) — In transit definition](https://www.accountingtools.com/articles/in-transit), 2025-12-25; Section heading: "What is In Transit in Accounting?", final sentence. Verified 2026-09-09.
_Not established from an authoritative source._
## The routine that keeps the account coming back to nil
- Among the best practices the article lists, the items in the suspense account should be reviewed regularly and frequently, with the objective of shifting transactions into their appropriate accounts as soon as possible. Presented as a best practice that can be applied, and the list is open ("several best practices"). _(jurisdiction: Not stated in the document; US-based professional accounting publisher (AccountingTools, US state CPE requirements), entity_scope: Not limited by the document; entities using a suspense account, accounting_basis: Double-entry bookkeeping, conditions: stated as a best practice, not a standard's requirement)_ `CG-MCE-026#S42`
> “Review it frequently. Regularly review the items in the account, with the objective of shifting transactions into their appropriate accounts as soon as possible.” — [AccountingTools, Inc. (author Steven Bragg) — Suspense account definition](https://www.accountingtools.com/articles/what-is-a-suspense-account.html), 2026-05-16; Section "Suspense Account Best Practices", best practice "Review it frequently". Verified 2026-09-09.
- The article's recommended cadence and ownership: the suspense account balance should be measured daily, and the controller uses that measurement as the trigger for ongoing investigations. _(jurisdiction: Not stated in the document; US-based professional accounting publisher (AccountingTools, US state CPE requirements), entity_scope: Not limited by the document; assumes an entity with a controller, accounting_basis: Double-entry bookkeeping, conditions: stated as a best practice, not a standard's requirement)_ `CG-MCE-026#S43`
> “Accordingly, there should be a daily measurement of the balance in the suspense account, which the controller uses as the trigger for ongoing investigations.” — [AccountingTools, Inc. (author Steven Bragg) — Suspense account definition](https://www.accountingtools.com/articles/what-is-a-suspense-account.html), 2026-05-16; Section "Suspense Account Best Practices", best practice "Review it frequently", final sentence. Verified 2026-09-09.
- As a best practice, all suspense account items should be researched and eliminated by the end of the fiscal year - i.e. the expected state of the account at fiscal year end is empty. _(jurisdiction: Not stated in the document; US-based professional accounting publisher (AccountingTools, US state CPE requirements), entity_scope: Not limited by the document, accounting_basis: Double-entry bookkeeping; fiscal-year reporting, conditions: stated as a best practice, not a standard's requirement; deadline expressed as end of the fiscal year)_ `CG-MCE-026#S44`
> “Finally, all suspense account items should be researched and eliminated by the end of the fiscal year .” — [AccountingTools, Inc. (author Steven Bragg) — Suspense account definition](https://www.accountingtools.com/articles/what-is-a-suspense-account.html), 2026-05-16; Section "Suspense Account Best Practices", best practice "Clear out by year-end". Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Who reviews it, how often, and the state it should be in at period end
- See above: Among the best practices the article lists, the items in the suspense account should be reviewed regularly and frequently, with the objective of shifting transactions into their appropriate accounts as soon as possible. Presented as a best practice that can be applied, and the list is open ("several best practices"). ([CG-MCE-026#S42](#s-CG-MCE-026-S42))
- See above: The article's recommended cadence and ownership: the suspense account balance should be measured daily, and the controller uses that measurement as the trigger for ongoing investigations. ([CG-MCE-026#S43](#s-CG-MCE-026-S43))
- See above: As a best practice, all suspense account items should be researched and eliminated by the end of the fiscal year - i.e. the expected state of the account at fiscal year end is empty. ([CG-MCE-026#S44](#s-CG-MCE-026-S44))
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Not yet fully established from an authoritative source
- Establish the accepted definition and intended behaviour of a clearing account in double-entry bookkeeping, and how it differs from a suspense account holding unidentified items and from an ordinary permanent balance-sheet account, by what each holds and what is expected to empty it; the characteristics by which an account is recognised as acting as a clearing account whatever it is named; and the mechanism by which a balance persists: a recorded event whose matching leg is absent, recorded at a different amount, posted to another account, or duplicated through a second route. _(partly established; below the required authority class)_
- Establish which clearing-type accounts mainstream small-business accounting platforms create or use automatically, what they are named, and which routine transactions post through them. _(not established)_
- Establish how the detail of a clearing account is produced and read in mainstream platforms so unmatched items can be separated from each other and from their offsetting pairs, and what those platforms permit a user to do to an entry already posted to the account - editing it, re-linking or re-matching it to its pair, voiding it, or posting a further entry - including how a closed or locked period constrains each of those operations. _(not established)_
- Establish how a clearing-account balance is evaluated in a set of financial statements and what an uncleared balance signifies for the reliability of the balance sheet and of the close, and the basis on which a balance standing at the reporting date is judged to represent money genuinely in transit whose matching leg is expected in the ordinary course rather than a residue whose matching leg will not arrive. _(partly established; below the required authority class)_
- Establish, for each shape of clearing-account break, the correction that properly clears it - whether it repairs or re-links the entry that created the break, or requires a further entry that removes the residue - and what each route does to the period holding the original entry and to the period in which the correction lands, including where the original period may no longer be altered. _(not established; below the required authority class)_
- Establish the documented close convention for a clearing account: what its periodic review consists of, the ownership and cadence that convention assigns in a small business, the state the account is expected to be in at period end, and the point at which an item still standing is escalated rather than carried forward. _(not established; below the required authority class)_
- Define the clearing account by function and by expected behaviour, establishing that its defining property is that it returns to nil rather than that it holds any particular kind of transaction. _(partly established; below the required authority class)_
- Distinguish a clearing account from a suspense account for unidentified items and from an ordinary permanent balance-sheet account, on the basis of what each is holding and what is expected to empty it. _(not established; below the required authority class)_
- Show how to recognise the accounts acting as clearing accounts in the reader's own file, including those the software creates and posts to automatically without being asked. _(not established; below the required authority class)_
- Establish the mechanism of a stuck balance as a broken pair, and enumerate the failure shapes: a missing second leg, mismatched amounts, a second leg posted elsewhere, and the same event recorded twice by different routes. _(partly established; below the required authority class)_
- Establish the clearing action for each failure shape, distinguishing corrections that repair or re-link an existing entry from those that require a new entry, and stating what each does to the period. _(not established; below the required authority class)_
- Distinguish a stuck balance from a legitimate balance that reflects money genuinely in transit at the reporting date, and give the reader a way to tell which they are looking at. _(partly established; below the required authority class)_
- Establish the review routine that keeps the account clearing, including its owner, its cadence and the expected state of the account at period end. _(not established; below the required authority class)_
- Establish what an uncleared balance does to the financial statements and why a growing clearing balance is evidence about the upstream process rather than only an account to be tidied. _(not established)_
## Related
- [What is the Opening Balance Equity account sitting on my balance sheet, and how do I clear it?](https://uppago.com/resources/what-is-the-opening-balance-equity-account-sitting-on-my-balance-sheet-and-how)
- [My card processor deposited one lump sum that doesn't match any day's sales — how do I tie a payout to the sales, fees and refunds behind it?](https://uppago.com/resources/my-card-processor-deposited-one-lump-sum-that-doesn-t-match-any-day-s-sales-how)
- [What should I do with bank transactions I can't identify or categorize?](https://uppago.com/resources/what-should-i-do-with-bank-transactions-i-can-t-identify-or-categorize)
_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._