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Bank account left out of Limited Company Accounts


I may well be one of those annoying book-keepers on the other thread...

My friend has showed me her accounts from last year (prepared by a Chartered firm) and this years books (written up by herself, checked by me as I am a book-keeper).

Despite having £3k in debtors at the end of last year and around £16k in the company bank account there is no mention of either on the Balance sheet. The 'cash at bank' figure is only the sum of tax owed plus the accountancy bill plus the shareholding. Is this ok? I was under the impression that the Balance sheet should show a picture of the company's assets at a given moment in time - I have asked the accountant for journals and a bank reconciliation and they tell me they never prepared any. I studied accountancy years ago and this is very different to what I remember! Her dividends recorded are only the amounts that she actually took from the bank during the year so they have not been accounted for "in advance".

I don't want to worry her if I have the wrong end of the stick but shouldn't the Balance sheet state what is in the account at the year end (give or take the debtors and creditors)?

Thanks for anyone who can offer an opinion...


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09th May 2011 16:05

Just to be clear

I take it your friend's business is a limited company?

Is the bank account held in the name of the company or is it in your friend's name?

Finally, stupid question I know, are you sure you are looking at the figure for 'cash at bank' and not - for example - at 'creditors'?


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09th May 2011 16:18

Not a stupid question!

Hi and thanks for replying

Yes it is a limited company and the Balance sheet looks like this

Cash at Bank £6500

Creditors £6400

Net assets = £100

Shareholders Capital £100

So it does balance! It's just that she actually had close to £16k in the bank account at the year end. And around £3000 of her sales which WERE in the turnover figure had not been received so I would have thought there would be debtors.

She made a profit (per the P & L a/c) of £22k and took it all as dividends.

Am I being stupid? I am trying to do an ETB for her and there is no opening balance per the balance sheet. How on earth can it possibly balance?

Many thanks - 75 reads and you are the first reply...I am very grateful.

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By Tosie
09th May 2011 16:28

Computer systems

Without the bank rec it is ofcourse difficult for you to identify but I suspect that when the accounts were prepared,

cheques that related to the accounting period but paid after the year end have been entered into the bank as though they had been paid in the year. This reduces the bank and removes some of the creditors. Likewise with the debtors.

I am only guessing at this but I have seen this done.


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09th May 2011 16:32

That's what I thought but...

I asked the accountant and they said they did not prepare a bank reconciliation as the company was not being audited!!! So they have not done one at all...can open...worms everywhere...

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09th May 2011 16:33

Makes no sense to me

All I can say is that I'm with you on this - I don't understand it!

The 'cash at bank' figure clearly is not the same figure as that on the bank statement and so there should be a bank reconciliation.  But you have been told none has been prepared.

Mystified - sorry!


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09th May 2011 16:48

Thanks anyway

I know..but I feel better for knowing it's not something blindingly obvious and I'm just being a potato head! Many thanks for taking the time to reply - very much appreciated.

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09th May 2011 17:27

Can anyone think of a reason?

Can anyone think of a reason why debtors and the bank account balance would be deliberately and consciously left off the balance sheet please?

On my ETB shall I reinvent last years closing balance sheet entry for both the bank and reserves so that the capital sitting in the account is at least represented?

She has changed accountants now and we wanted to present the new one with complete figures (to keep costs down) but the only way this looks possible is to (almost) re-do last years balance sheet.

If anyone can help we would be very grateful.

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By Tosie
09th May 2011 19:49

Professional clearance

As you have not got enough info to prepare a trial balance I would leave it to new accountants to sort out.

They will get professional clearance and make a decision whether the facts are material and if they need to do any further work.


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