Create an adjusting entry
An adjusting entry (or entry) adjusts one or more accounts of the trial balance. Ledger lets you enter it by hand, generate it automatically from a worksheet, or push it to QuickBooks once it is final. This guide covers every option in the dialog.
Anatomy of a Ledger entry
Every adjusting entry, whatever its source, has the same structure: a header (date, reference, description), a body (2 or more lines, each with an account, a debit and a credit), and advanced options (PYA, reclassification, attachments). Debits and credits must balance, or Ledger refuses to save the entry.
Two places to open it
Depending on where you start:
- From the Adjusting entries page, the “New entry” button at the top right. Useful when you already know what you want to enter.
- From the trial balance, the paper clip at the right of a row opens the dialog with the account already filled in. Faster when you are reviewing the TB and a row needs a correction.
Enter an entry, step by step
Set the date, reference and description
The date is limited to the current fiscal year. To adjust the prior fiscal year, check the Prior-year adjustment (PYA) option further down: the date is then capped at December 31 of N-1 (or the N-1 year end).
The reference is optional but recommended: a short code such as A1, BB15 or 730 (as on CaseWare working papers). It prints to the right of the description, handy for whoever checks the file.
The description sums up what the entry does. Writing it well saves you time six months later.
Add the lines
Each line needs an account and an amount in debit or credit. Click the account field to open the picker: you can search by number or by name, and Ledger lists recently used accounts first.
The Line description field is optional, useful when several lines of the entry need their own comment (“partner A's share”, “partner B's share”).
Choosing an account on the last line automatically adds a new one below, as in a spreadsheet: you keep adding lines without leaving the keyboard. The “+ Add a line” row at the bottom of the table stays available. The footer shows the totals and a green ✓ or red ✗ badge depending on whether the entry balances.
Ledger suggests the entry's overall description as the default for each line, so you don't have to retype it. You can always overwrite it.
Attach supporting documents (at any time)
The Attachments block is always visible below the entry lines, whatever the type of entry. Drag in the supplier invoice, a cheque copy, an email from the client, or an Excel calculation file. The document stays linked to the entry, and it also appears in Documents and on the related row of the trial balance.
Accepted formats: PDF, images (PNG/JPG), Excel, Word, just about anything under 25 MB. You can attach several.
Check the balance, save
The Save button stays disabled as long as debits ≠ credits. Click it to confirm: the entry automatically gets its ADJ-YYYY-NN number, and you return to the list. It is immediately reflected in the Adj. and Ending balance columns of the TB.
The four advanced options
By default, the dialog hides what a standard entry doesn't need. Click “Advanced options” to expand these four choices, which change the nature of the entry.
Prior-year adjustment (PYA) Fixes N-1
Check it to apply the entry to the PRIOR fiscal year (Prior Year Adjustment). The date is automatically capped at the end of N-1, and income statement lines are routed to opening retained earnings rather than to the current year's revenue and expenses.
Typical case: a supplier sent an invoice dated December in January. You record it with PYA checked so that it appears in the N-1 expenses and the year's opening retained earnings balance is corrected.
Sub-option when PYA is checked: Carry the restated net income to retained earnings. Uncheck it if the carry-forward has already been done by hand.
Reclassification entry RECL badge
Check it to mark the entry as a presentation reclassification: it moves amounts from one account to another for financial statement presentation. It affects the adjusted trial balance, the financial statements and the general ledger like a normal adjusting entry, but never touches the client's books:
- at year-end roll-forward, it is not carried forward: the next year starts from the actual balances, without the reclassification;
- it is never sent to QuickBooks;
- it is excluded from tax calculations (tax report, GST/QST worksheet).
Typical cases: presenting an advance in the right caption, moving an amount between two expense accounts, splitting out a credit balance. When entries are printed, reclassifications show with their RECL badge (there is an option to hide them).
Mutually exclusive with PYA and Inter-company.
Operation entry (manual) OP badge
Check it to mark the entry as an operation entry rather than a preparation adjustment. It then appears in the Operations view of bank bookkeeping and feeds the tax report through its amounts on the tax accounts (103 GST/HST collected, 106 ITCs, 203 QST collected, 206 ITRs).
When this option is checked, a second choice appears: Destination in the tax report.
- Regular transaction: the amounts feed lines 103/106/203/206, like a normal bank transaction. Use it when the manual entry replaces a transaction that should have come from the bank.
- Tax adjustment: the amounts go to lines 104/107/204/207 of the return. Use it to correct a prior return or a difference from the calculated amount.
Inter-company entry (group) Mirror
Check it when the entry hits an inter-company account (typically 1900 or 2900) and you want the offsetting entry to be created automatically in the sister company of the same group. Ledger generates the mirror entry (debit and credit reversed, accounts mapped) and links the two entries together so they stay consistent.
The selector lets you choose the target company among those in the same Group of companies (see Create a client), and the account mapping appears below the table for you to approve.
Available at creation only. Greyed out when the company is not in any group. Mutually exclusive with PYA and Reclassification.
An entry entered from the Adjusting entries module is treated as a preparation adjustment (ADJ badge): it appears on the adjusting entries report, not in the operations. An entry generated from Bank transactions is an operation, and that is where the Regular transaction / Tax adjustment choice comes up.
Automatically generated entries
Several Ledger worksheets generate their own entry: you enter the worksheet data, it calculates and posts the entry in one click. You don't have to re-enter it by hand, and if you change the worksheet, the entry updates.
An entry generated from a worksheet keeps a link to its source. If you change the worksheet (a new acquisition, a revised depreciation rate), the entry updates automatically. You can also “detach” it to freeze it manually.
Tips
The Operation column of the TB (read-only) aggregates entries from Bank transactions. The Adj. column aggregates your manual adjusting entries. Keeping them separate lets you see, on any account, what came from the bank and what came from your judgement.
Next to the New entry button, Import from prior year lists last year's entries with two actions per entry: Copy (reproduce the same debits/credits) or Reverse (post the opposite, to unwind a year-end accrual).
From any page, Ctrl+E opens the New entry window, and Ctrl+Enter saves it and starts the next one. Esc closes without saving. All shortcuts
Edit, duplicate, deactivate, delete
On the Adjusting entries page, each entry has four icons at the top right:
- Deactivate (power icon) removes the entry from all calculations without deleting it. See below.
- Edit (pencil) reopens the entry so you can correct it. The general ledger opens it too: click a line in the general ledger to see the full entry, then the pencil.
- Duplicate (two sheets) creates a new entry copied from this one, dated the following month. See below.
- Delete (trash) removes the entry and its effects on the TB. You are asked to confirm: deletion is permanent.
Duplicate an entry that comes back every month
Rent, management fees, the month's depreciation: an entry you post by hand every month is copied in one click. Click Duplicate on last month's entry. A new entry opens, already filled in: same accounts, same amounts, same description, same reference, dated the same day the following month. Adjust what changes, then click Save. The original entry stays as is.
- An entry on the last day of a month stays at month end: January 31 becomes February 28, then March 31.
- If the following month falls outside the fiscal year (year-end entry), the copy keeps the same date.
- An operation entry stays an operation entry, with the same tax destination in the tax report.
- An entry generated by a worksheet becomes a manual entry: the worksheet only manages its own.
- Attachments are not copied: add this month's in the new entry.
- The Duplicate button is also at the bottom of the edit window, so from the general ledger too: click a line, then Duplicate.
Deactivate an entry to see its impact
While analyzing the file, unsure about an entry? Click Deactivate. It stays in the list, greyed out, with its number and a Deactivated badge, but it no longer has any effect: the TB, financial statements, general ledger, taxes, roll-forward and the QuickBooks push all ignore it. Look at the financial statements without it. If it is correct, come back and click Reactivate: everything is back as before.
- Numbers do not shift: deactivating #2 does not turn #3 into #2.
- A banner at the top of the page counts deactivated entries, so none is forgotten when you finalize the file.
- Operation entries (bookkeeping) cannot be deactivated: they are the client's books.
- A deactivated entry is left out of the printed list of adjusting entries.
Follow a statement: the month filter and the blue check
Next to the search box, the All months menu lists every month of the fiscal year. Pick one to see only the entries dated that month, operations included: it is the quickest way to compare the page with a bank statement.
- Operation entries are sorted by date, as on the statement. Adjusting entries (#1, #2…) keep the order of their number. The Ascending order button switches to Descending order to see the newest first; Ledger remembers your choice.
- A blue check next to the code marks a reconciled entry. Hover over it to see the account and the statement date (for a transfer, each side). An operation without a check in a month that is already reconciled is worth a look: it is often an error or a duplicate.
- The All entries menu keeps only the Reconciled operations or the Unreconciled operations. With a month selected, the unreconciled operations of that month are the ones left to tick off, or to fix.
- Before you edit a reconciled entry, Ledger warns you: if its amount, date or bank account changes, the ledger will no longer agree with the reconciliation. The delete window says so too.
If the fiscal year has been closed (rolled forward to the next year), Ledger blocks any change to keep it consistent with the signed financial statements. To make a correction, first reopen the fiscal year from Engagement actions, apply your change, then close it again.
File done? Push everything into the client's QuickBooks
When adjusting entries are final (file reviewed and signed off), the QuickBooks button at the top of the Adjusting entries page pushes each entry into the client's QuickBooks Online, one journal entry per adjustment, flagged “Adjusting Journal Entry”. This is the step that saves the client (or you) from retyping everything into their books: their balances catch up with your financial statements in one send.
- Sent: your manual adjusting entries and those generated by worksheets.
- Excluded automatically: operation entries (the client already has them), reclassifications (RECL), PYAs and deactivated entries.
- The account mapping (your chart vs theirs) is done once, then remembered for that client.
- Safe to re-run: an entry already sent is skipped on later sends, so there are no duplicates.
The full walkthrough, the options (document number prefix, Adjustment flag, tax lines) and common errors are in the dedicated tutorial: Push adjusting entries to QuickBooks.
Frequently asked questions
Can I edit an entry after saving?
Yes, as long as the fiscal year isn't closed. Click the entry to reopen it, change what you need, save. The TB updates instantly.
Why can't I select this account in the picker?
The account picker is strict: only accounts that exist in the TB show up. If an account is missing, add it in the trial balance first (button “Add a row”), then come back.
The list of entries is long, how do I find one?
A search bar at the top filters by code (ADJ-2026-014), description, account, or amount. The “X of Y entries” count tells you how many entries match.