Opening debtor £2,500 wrong!
anniem
Registered Posts: 1,326 Beyond epic contributor 🧙♂️
Please can someone help me.
I'm trying to finalise a set of accounts, but the opening debtor balance is £2,500 overstated as it was incorrectly calculated for last year end accounts which I can't change now.
Do I just reduce the balance on the sales ledger this year?
Somehow I can't figure out the other side of the double entry, is it because I think it should be reducing last years debtor?
Sorry to be asking stupid questions!
I'm trying to finalise a set of accounts, but the opening debtor balance is £2,500 overstated as it was incorrectly calculated for last year end accounts which I can't change now.
Do I just reduce the balance on the sales ledger this year?
Somehow I can't figure out the other side of the double entry, is it because I think it should be reducing last years debtor?
Sorry to be asking stupid questions!
FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
0
Comments
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Had a similar problem, KPMG (accounts had to be audited) advised me that that the balance is w/o so reduce your Debtor Balance so it is correct and charge the difference to COS.
Might be worth while for further investigation to make sure that all the other accounts were fully reconcilled, for the Prior Year IMO as it could be sat on the balance sheet sorry statement of Financial posistion.....:D0 -
You need to reverse whatever was done last year. So you need to find out what that was to work out the double entry.
Make sure you can back it up if anyone was to ask.0 -
It's an inter-company balance, between farms. The debtor is shown on Farm A accounts, being done at the moment to ye 30.9. Farm B has a 5.4 ye.
There was an incorrect valuation done on some hay/silage being sold by farm A to farm B - all under the control of the farm secretary before me.
There is no payment for the hay/silage from farm B to farm A in the years accounts, as farm A also owe farm B on a profit share.
What I have done at the moment is a T account between the two farms and just used the balancing figure, which is now showing a creditor balance, not a debtor - including the final profit share figure for 2009 and a provisional profit share for 2010.
Problem is you reach a stage where you have gone around in so many circles trying to unravel it you addle your brain!!!!!FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire0 -
Rather you than me love, I'm getting confused just reading about it! I really don't like stuff like this it totally bakes my noodle...... good luck, it's nearly the weekend....!!0
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Rather you than me love, I'm getting confused just reading about it! I really don't like stuff like this it totally bakes my noodle...... good luck, it's nearly the weekend....!!
Yeah - I know it's the weekend; I took it home to do over the weekend as I had already 'baked my noodle' at work
FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire0 -
Monsoon is correct in her suggestion for treatment although it also depends on how hard (and threfore cost effective) it is to unravel. It does not sound like a significant amount in terms of turnover (guessing!) and in view of the fact that it originated with an incorrect valuation I would work oout a balancing firgure and write it off as Slackda suggests.
The treatment in Farm A accounts should agree with the treatment in Farm B accounts so it depends which way round they are being done too.
It is academic in some respects as intercompany t/a's get are discounted in the consolidated accounts.
What would possibly make it easier is if they both had the same y/e so maybe you could look at changing that.0
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