First you have to make sure you are running your Customer Aged report with all inactive customers and compare the total with the A/R balance on the balance sheet for the same date.  Also check your Data Integrity on the Maintenance menu (in single-user mode) to make sure the A/R is in balance.

If it is, then the invoice(s) was/were written off (likely) to bad debt instead of AFDA in past years.  You can trace this through the ledger reports for each year.  If this is the case, just post an entry to move the amount from bad debt expense to AFDA to bring the balance to zero (assuming zero is applicable at this point).

I am assuming there are not any old invoices deemed uncollectible on the Customer Aged report right now that are dated back when the ADFA was set up.

Thank you for your reply. 
i run the customer aged report including the inactive customers and the total AR balance from the report doesn’t agree to the total in the BS. 
I have some questions:

1) what do you mean that the amount was written off to bad debt instead of AFDA? I believe the entry is Dr. Bad debt expense and Cr. AFDA so these two accounts are connected. 
2) how would I move the amount from bad debt expense to AFDA? I would have to Cr. The expense account which would increase taxes. 

your last assumption is correct and I don’t want to only clear the AFDA balance but reduce AR by the same amount. 

thanks in advance. 

Richard S. Ridings said:

Also check your Data Integrity on the Maintenance menu (in single-user mode) to make sure the A/R is in balance.

I suspect it is also out of balance?

1) The original AFDA would have debited the bad debt expense and credited ADFA.  Therefore you took the expense at the time that entry was done.

But if what I suspect has happened, someone posted an entry directly (and possibly incorrectly) to the Accounts Receivable Asset account from the general journal instead of the sales module, then you actually have two problems.  However, this entry would have likely gone to Bad Debt expense as well because as you say, you have a balance in AFDA still.

2) You are correct.  But if what I suspect happened, you have already double expensed in previous years.  Without the above question being answered and without tracing the Bad Debt expense account entries through previous years, it is hard to tell for sure from my end.

Alexandros Paravatos said:

i run the customer aged report including the inactive customers and the total AR balance from the report doesn’t agree to the total in the BS. 

Are both reports run on the date date (I usually use the Latest Transaction Date)?

Is there a way to allow a posting to the AR balance sheet account and then put setting back?  I have a similar issue with (2 )  AR accounts, one CDN and one US.  In total AR balances but there is nothing associated to the US AR account. I want to do an entry from the AR US to the AR CDN.   This issue have been on books for year so nothing to trace back to.