I need to write off several sales tax liability accounts with credit balances. No taxes are due to the taxing authority. After careful reconciliation, I have determined that prior invoices to the taxing authority were posted in error to just one taxing authority account instead of debiting each taxing authority accounts for the liabilities. These invoices, which belong in prior periods can't be deleted in order to reverse the posting. They have been posted and the periods have been closed. It seems unreasonable to post the credit side of the write off to other income. Is it appropriate to post the credit side of the transactions to the retained earnings account and keep it on the balance sheet.

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Originally Posted by stovespa

I need to write off several sales tax liability accounts with credit balances. No taxes are due to the taxing authority. After careful reconciliation, I have determined that prior invoices to the taxing authority were posted in error to just one taxing authority account instead of debiting each taxing authority accounts for the liabilities. These invoices, which belong in prior periods can't be deleted in order to reverse the posting. They have been posted and the periods have been closed. It seems unreasonable to post the credit side of the write off to other income. Is it appropriate to post the credit side of the transactions to the retained earnings account and keep it on the balance sheet.

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No just move the balance to a prior year minor adjustment account in other income, is this any different to writing off an old credit balance in a payables account