When you receive a bank statement and are ready to reconcile your checking account for the first time using MYOB AccountEdge, there is an extra step you must perform before you can begin successfully reconciling your checking account.
A mix of transactions -- previous accounting method and AccountEdge
When you reconcile an account for the first time using AccountEdge, some of the checks you wrote and some of the deposits you made before you began using MYOB AccountEdge will probably be reflected as cleared in your bank statement.
That is, because you've changed your accounting method, some of the checks/withdrawals and deposits that appear as cleared on your bank statement were recorded using your previous accounting method (the transactions don't appear in AccountEdge) and some were recorded using AccountEdge (the transactions do appear in AccountEdge).
In order to reconcile the account using AccountEdge, all of the bank statement entries -- including those transactions recorded using your previous accounting method -- must appear in the Reconcile Accounts window of AccountEdge. This situation must be resolved before you can successfully reconcile the account.
Create a general journal entry for previous accounting method transactions
To resolve the situation, you'll create a general journal entry in AccountEdge that reflects all of the uncleared checks/withdrawals and deposits that were recorded using your previous accounting method. The journal entry that you create will contain entries that debit and credit the same account, that is, the account you're reconciling. (The detail of these transactions remains in your previous accounting system.)
Your account balance won't change
Each uncleared check you wrote and each uncleared deposit you made before using AccountEdge should be entered as a line item on a general journal entry. Since the totals of the debit and credit entries most likely won't be equal, a balancing amount entry must be added to the general journal transaction. The total amount of the debits will equal the total amount of the credits, therefore, the general journal entry won't change your account balance. (Creating a journal entry for first-time reconciling)
When you record this general journal entry, each line of the general journal entry will appear in the Reconcile Accounts window for the account you're reconciling. You'll then be able to reconcile these transactions as they appear on your bank statements as cleared transactions.
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