You are correct, it shouldn’t be 2016 income, it should be a 2016 “uncollectible debt” expense. This will automatically adjust the retained earnings.
It doesn’t matter when the debt became uncollectible – you have to put it in the current year, because the previous year’s books are closed.

Resolution for '2016 income issue: 'If I write off invoices for 2013, shouldn’t it be an adjustment to retained earnings, instead of 2016 income?' available: Yes.

The 2016 income issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the 2016 income issue yourself by looking for a resolution described in the article. If it is a complex 2016 income issue or you are unable to solve the issue, you may contact us by clicking here or by using other 2016 income support options.

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