Prior year trial balance from previous accountant does not match

TM09TM09 Posts: 2MAAT, AAT Licensed Accountant
Hi,

I wondered if any other members in practice had encountered a client take on where the filed prior year trial balance does not match with the clients' accounting software trial balance at year end?

I've just taken on a client and, following professional clearance, received a trial balance from the previous accountant which uses a different chart of accounts and has different period end balances to that showing in the clients accounting software (Xero). I've located the account codes with differences and suspect that there have been a (large) number of postings after the year end has been completed. Unfortunately, the client does not recall which transactions this may have been but we've established that there were a number of unreconciled bank transactions that hadn't been resolved (as disclosed by the previous accountant). Not sure how the final accounts were completed with unreconciled transactions on the books but that's another story...

My question is, given the trial balance in the clients software does not match with the filed accounts; how best can I correct this to ensure the next set of accounts can be completed?

Thanks in advance for your advice & experience on this!

Best,
TM

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderPosts: 1,461Moderator, MAAT, AAT Licensed Accountant
    Hi
    It looks that you would need to enter a closing balances adjusting journal.

    I usually extract the unadjusted TB from Xero at the year end, compare the values with the accountant's TB and enter the differences as one Journal on the software dated at the year end. Then your opening balances are hopefully correct.
    For simplicity you may want to ignore individual differences in the P&L and just do an adjustment in retained earnings.

    I hope this helps.
  • TM09TM09 Posts: 2MAAT, AAT Licensed Accountant
    Many thanks MarieNoelle.

    I've prepared a journal with the relevant adjustments so will enter that and hopefully all will be correct.

    Appreciate your advice on this, I've not come across this situation before so wanted to make sure I was dealing with the adjustments correctly.
    MarieNoelle
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