Pub Waste

Hi Guys
This is a new one to me just taken over books for a pub, there previous bookkeeper has been putting through a journal to cover beer waste etc.
They have been told by there accountants to put through the following journal every month:
Dr - Sales £ 645.00
Dr - VAT Account £ 96.75
Cr - Creditors £ 741.75 ??????
I have never come across this before can anyone help?? Am i being stupid or is this correct surely it shouldn't be on the balance sheet even if the profit & loss part of the journal is correct?
Any help would be great
Thanks
Tim
This is a new one to me just taken over books for a pub, there previous bookkeeper has been putting through a journal to cover beer waste etc.
They have been told by there accountants to put through the following journal every month:
Dr - Sales £ 645.00
Dr - VAT Account £ 96.75
Cr - Creditors £ 741.75 ??????
I have never come across this before can anyone help?? Am i being stupid or is this correct surely it shouldn't be on the balance sheet even if the profit & loss part of the journal is correct?
Any help would be great
Thanks
Tim
0
Comments
I Only thing i can think of is the beer stock isn't theirs and is the brewery's untill sold.
DR COS (wastage account)
CR BEER STOCK .
Assuming that a purchase of beer from the brewery creates:
DR BEER STOCK
CR CREDITORS
Seems like a way of artificiallly reducing the the turnover of the business though...
When a journal entry is prepared it should have a narration.
New Updated Site ! www.manukauservices.co.uk , just thought I would point that out to you.
As it says on the website its an Extract from Companies house website :P
but thats not important, the thread is about pub waste and the treatment, anyone got anything useful to bring to the table?
Otherwise :-
http://www.livescience.com/technology/090821-ideas-beer-power.html
or even:-
http://www.thefishsite.com/fishnews/6059/beer-waste-becomes-fish-food