s corp gross revenues from P&L cash do NOT match gross revenues in 1120s
Submitted by Anonymous on Thu, 2008-08-07 06:03.
In the middle of an audit, it was found that the P&L cash basis of a past year did not match the gross revenues (1st entry) in a submitted 1120s. Is this normal?
Company is set-up for accrual accounting, but cash-basis for corporate income tax purposes.
In short of asking former accountant, I would like to know whether the differences are normal.
My understanding is that P&L gives you the income & expense for the time period allocated in quickbooks (i.e. month, year, etc.), but it does not give an accurate representation of how much money is currently in the bank before/after this time period.
A stupid question - where does the dollar amount in gross revenues on 1120s come from if not P&L?
»
- Add new comment
- 189 reads
Accrual vs Cash Accounting
Hi,
There is almost always a difference between cash & accrual basis reporting. In QuickBooks you can set a preference to report on Accrual or Cash basis. If you normally report in Accrual you must manually select Cash basis by modifying the report. The basis of the reporting is on the left header of the report.
The cash in the bank is reported on the balance sheet.
The dollar amount on the return should come from the cash basis P&L. Your accountant should have a copy of their work papers that show where they got that number. They should be able to provide you a copy of that. I would let them know you're in an audit if you haven't already.
Hope this helps.
L:)
edit on the inquiry - for clarification purposes..
I meant gross receipts on the first page of 1120s - not gross revenue.
The P&L cash basis provides sales at top, then COGs, then expenses, then net income.
The sales at this top don't match the receipts on the 1120s.
I really appreciate any input in this matter!
Thanks again for your time!