Debtors problem

Hetts

Hi

I have a debtor problem. Company received £175000 in the last financial year as settlement for a legal situation. This was entered by previous accountants as other debtors. It is still in other debtors even though the money was received by the bank and included in last year's accounts. This amount is still showing in the other debtors for this financial year. Where would I put it?

Thanks

Rinske

Where did the other side of the bank entry go? As that would be your best bet to correct it.

I would personally check the double entry in the bank entry, see where it got coded and code the correction to that code and other debtors to even it out.

wildgoose1uk

How was the £175k treated when it was received by the Company? As it stands the cy debtors figure is overstated by £175k and needs to be reduced. Assuming the receipt was handled 'sort of' ok then I would probably look at doing a reversing journal with an explanation in the narrative and a copy of the original journal as backup, with perhaps a copy of the detail of how the receipt was dealt with.

I am guessing the receipt just went through the nominal ledger as a cash receipt.

wildgoose1uk

great minds......