Bank figure on a balance sheet

clearaccounting100
clearaccounting100 Registered Posts: 49 Regular contributor ⭐
My sister in law is a sole trader and has asked me to do her 2nd yr accounts. I have a copy of the accounts prepared by the account for the 1st years trading. The figure on the previous yrs balance sheet @ 31/03/08 is £950 under the current liabilities and therefore an overdraft. However, my problem is that i have the bank statments for the yr and the balance of the bank on the 31/03/08 is £15,000 in the black! i cannot work out how the previous accountant got this figure. The fig on the b/s bank should be the balance of the account as of that day shouldn't it!? i have looked at the previous bank statement page's and at no point does the bank balance equal the fig the accounts show on the b/s. Am i missing something? is there any situations where the b/s wouldn't reflect the cleared balance on the bank statement? The only way i can get my trial balance to balance is to debit the bank by about £16000 and credit sales by £16000! Any comments or help would be very much appreciated, i think i am missing somethig or being extremely dumb :crying: Many thanks

Comments

  • Jan
    Jan Registered Posts: 654 Epic contributor 🐘
    What was the reconciled bank balance at 31.03.08? That is the figure that should be on the balance sheet.

    It would be very unusual not to have any cheques that hadn't yet been presented at the bank at year end. Most companies write their cheques out at or towards the end of the month, so at a guess your sister in law paid off her creditors just before 31.03.08.

    Unless I am missing something?
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
    You need to request a copy of the bank reconciliation from the previous accountant, or you can re-create it yourself if you have last years cheque books.
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
    Hi Jan, thanks for your post, her reconciled bank balance was £1808 o/d so that's a lot nearer. Thanks v much for the advice. :thumbup:
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
    Thank u both for your advice, it is v.much appreciated :001_smile:
  • AK002
    AK002 Registered Posts: 2,492 Beyond epic contributor 🧙‍♂️
    Yup as said, it's the reconciled balance at the year end, not actual bank balance.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    We had a strange experience at work, the then main accountant was working through bank reconciliations that I'd done, and looking at bank balances and trial balances, but couldn't work out why there was a 10k difference. Turns out it was a month end movement to the high interest account. It had gone from the current account but not yet hit the other account.

    Bit sad that I thought that was an interesting story :001_unsure:
  • Jan
    Jan Registered Posts: 654 Epic contributor 🐘
    Bit sad that I thought that was an interesting story

    Do you also feel like doing a high 5 when you've reconciled a difficult bank account? :lol:
  • lorraine
    lorraine Registered Posts: 404 Dedicated contributor 🦉
    I do lol!
  • Toffeemadblue
    Toffeemadblue Registered Posts: 102 Dedicated contributor 🦉
    I'm mostly in tears at that stage !
  • Jan
    Jan Registered Posts: 654 Epic contributor 🐘
    As the only one working in finance in my office, it's so good to know I'm not alone, although don't think I've ever been reduced to tears, Matt.
  • lorraine
    lorraine Registered Posts: 404 Dedicated contributor 🦉
    I'm the only one in the Accounts Office at work and also I don't know anyone that works in finance, no-one knows what I'm talking about can be frustrating but at least I can go on this forum and type to finance minded people, life saver! don't know what I would do without it.
  • Jan
    Jan Registered Posts: 654 Epic contributor 🐘
    Definite life saver coming on here.

    I work in the same office as one of the secretaries. There is a great nashing of teeth whenever she has to type into an excel program, especially when "it thinks for itself"

    She tells me she doesn't know how I do my job , I don't know how she does hers, is usually my reply.
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
    I' got it to balance, thanks v.much! I also like to hi 5, jump about or do a huge whoopie and a little dance when i get something difficult to balance! it's a good job i work in my own home!:001_rolleyes:
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