Nominal Code 3200 (profit and Loss account)

sarahuk3 Registered Posts: 31 ? ? ?
Good Afternoon,

Just wondered if anyone could clarify something about this nominal account on sage.

I am looking at a relatives accounts - he is a sole trader and I have completed the book keeping for 2011/12, run the year end and it seem like he has made a journal for 2010/11 for depreciation that is still on the account, but he posted the following:

Cr 0051
Dr 3200

When I have run the year end for 2011/12 there is a balance in 3200 of £323.82 but total depreciation he charged for 2010/11 was 350.19

I don't really understand why he had posted the charge to 3200 as it should have been 8000 and I could use a hand with knowing what journal to post to correct this? When I look at the balance sheet for 2012/13 the amount is on the balance sheet and I don't really want it there!?

Many thanks for comments and help greatly appreciated and I hope all of the above makes sense!



  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    To clear it you would dr 8000 and cr 3200 with the depreciation amount. Did he post it with a date before the year end or in the 2011/12 year?
  • coojee
    coojee Registered Posts: 794
    If he's making a posting into the previous year (ie the transaction is dated in last years accounts) then it's standard procedure to use the retained profit account. You can't use any of the P and L account codes as it relates to last year.
    Y/E 31st Dec 2011.
    After the year end the accountant tells you to post depreciation of £1000.
    The year end procedure has already been done on Sage so all the P and L accounts have been cleared down to zero and the balance has been transferred to 3200
    You make the entry and date it 31st Dec 2011 (ie the last day of last years accounts)
    You have to enter the DR entry to 3200, you can't enter it to 8000 because it will just sit there on the P and L account and never get cleared down to 3200 as part of the Y/E procedure.
    If the Y/E procedure hasn't yet been done on Sage then you can enter DR 8000 and CR 0051, then when you do the Y/E it will get transferred to 3200.
    Either way it still ends up in 3200 so it's correct for it to be there if it's dated in last years accounts.

    If it's dated in the current years accounts that's a different matter, by the sound of it though if it is dated in the current years accounts then it's still wrong because it relates to last year.
  • sarahuk3
    sarahuk3 Registered Posts: 31 ? ? ?
    thank you for your replies,

    His journal is posted 31/03/2011. Ie 2010/11

    I have made the journal for depreciation for 31/03/2012 ie 2011/12 and have posted Dr 8000 Cr 0051.

    Blue Wednesday, if i did that then the Profit and Loss statement for 2012/13 would show depreciation charge for 2010/11? would that be correct?

    Am i right in thinking, in theory, the balance should have been cleared at the end of 2010/11 but has just been sitting on this account - and sage will never clear it off as it has been posted directly to 3200.

    Thank you

  • villapb
    villapb Registered Posts: 357
    Hi Sarah, i would have changed the program date to 31 dec 2011, for last year end just to make sure, its help with dates as you dont forget when doing adjustments, then chage it back for this year.
  • sarahuk3
    sarahuk3 Registered Posts: 31 ? ? ?

    I didn't make the journal for 2010/2011 my relative did, he posted this on the 31.03.2011 and then he ran the year end.

    I have done the bookkeeping for 2011/12, made necessary journals and then ran the year end.

    I did change the dates in sage for the year end, but the question is in regard to the year 2010/11 which i can't really go back and redo the journal as then i would have to start again with 2011/12 and it there has been a lot of work!!

    I would like to know what I can do, or if i need to do anything with the depreciation charge which relates to 2010/11 that is still showing in 3200 as it was directly posted to this account and when i run a balance sheet for 2012/13 it is showing on there.

    I don't know where to journal the balance!?

  • villapb
    villapb Registered Posts: 357
    Hi Sarah i had a quick look at ias 8, accounting policies errors etc, its says that period errors in compartive fiqyres should be corrected, which yours comes under mistakes in applying accounting policies, by the relative i add lol. Two things to think about is the, mistake material and is the work required to correct the error going to to really effect the decisions that the user of the accounts will make. I think not and maybe put a note in to say what has happened, remember accounts are estimates. If the information you provide this year is relevant and reliable and a note gives the infromation rquired, cant see a problem, not worth getting bogged down. If the mistake is material, sorry but youll have to re work it, nothing you can do.
  • sarahuk3
    sarahuk3 Registered Posts: 31 ? ? ?

    Thanks for this.

    In a way I'm probably being too fussy about his bookkeeping as I don't like balances being in accounts which should not be there so was trying to find a way to correct.

    No, this won't effect decisions etc, but does it mean that this balance will always be in the account?

    Thanks for the advice.

  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    HI Sarah

    It sounds to me like he has posted in the previous year so will need to be reversed out or your opening balances won't agree for the current year. Have I misunderstood or is that what has happened. Basically if that is the case Coojee has given you what needs doing.

    You will have a balance in the profit and loss account after the first years trading as it is the accumulated profits for the years that the business has been trading (less the accumulated losses). This balance this year would equal the first years profits until you run the 11/12 year end.

    Once this journal has been reversed out (as it is an incorrect journal) then a check for you should be that all the opening (or brought forward) balances agree to the balance sheet in last years accounts.

    Am happy to look at reports etc should you wish - just pm me.
  • Ronnie
    Ronnie Registered Posts: 20 Dedicated contributor ? ? ?
    As he is a sole trader, clear 3200 P&L against the Capital account. I also clear the year end drawings figure by journalling into the Capital account. Do the journal using the last date of the previous year, presumably 31.3.2011. Check brought forward Trial Balances with his Accountant's opening balances.
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