USA Balance sheet liabilities adjustments

[Book Junkie]

I have several liabilities on my balance sheet that are not accurate. Let me explain. We have a modified cash basis and are not for profit so we don't deal with a lot of the things most of you do. However, on the balance sheet under liabilites several accounts that should be zero are not because of errors in previous years (by another bookkeeper). Examples are "401k withheld", "FUTA withheld" and a few insurance "withheld" accounts. Do I need to adjust the wrong amounts to retained earnings and what would the entries look like?

 

[Fidget]

How you sort that out depends upon how material the amounts are to your overall financial statements.

Being not for profit doesn't really matter when it comes to the correction of errors.