Guys how do I know when to make AJEs without looking at the prior year? I know the usual M-1 adjustments for meals and penalties and such. I know how to tie retained earnings and how to adjust depreciation. But I just don’t get the other stuff. How did you go about it? Is looking at the prior year the usual route?

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Typically the process begins with a Trial Balance (TB) Provided by Client ( PBC). From there you will have supplemental work papers ( WP) to support various accounts.

You will make an AJE when supplemental WP differ from the TB. These can be loan statements that show a different balance than the TB. This may be due to client’s incorrect reporting of principal & interest when recording payments. Payroll is another one. Those supplemental WP will come from the 941 Payroll returns.

Depending on the client, one may look through the General Ledger (GL) and see thing a that are misclassified.

Anytime one needs to move amounts from one account to another, on the TB PBC you will do an AJE. Those AJE’s will “true up” the client balances to what they should be. Those AJE’s will also go back to the client so they can make the corrections to their books for Year End (YE).

M1 JE are done to show book tax differences. This could be a difference in Book vs Tax Depreciation, Meals, Non Deductible Penalties etc. those do not go back to the client, since they only maintain Book entries.

Internships in accounting can be tough, primarily due to the short nature of time involved. It also depends on who is mentoring you, if anyone. Sometimes firms only give a brief overview to determine if there’s interest. This may be where firms may fall short. There is a delicate balance between mentoring/teaching and investing time on someone who may not return.

I have 25+ yrs of accounting, bookkeeping and tax. 14 years in Public Accounting. I do take the time to mentor and train interns through partners.

Hang in there. Find someone you can connect with and ask questions. Good luck.

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Thank you!!

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I still have no clue how to do a gd journal entry, but that’s why I’m in tax…

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lol I’m in tax too but that’s good to know that even ppl above me are like this😂

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Usually I use py file as well as meeting with my manager to understand the client and also understand why the testing we did last year was necessary. 90% of the times they’ll be very minimal changes.

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Love the meme

Okay gotcha I just wanna learn as much as possible so that I truly know what I’m doing instead of blindly following what we did in the previous year. I’m definitely going to ask more questions bc I do care about the work I put out

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