Blogger
Share this content
0
5
1731

How to Write off incorrect opening debtor balance

Hi all,

Our company moved from paper records to computer records for our accounting a couple of years ago in 2011.

We have found out that our opening trade debtor balance was overstated by 2k but have no idea what this relates to as a past accountant was doing the books.

We therefore want to write this 2k off in this financial year. Would the correct entry be to credit trade debtors and debit bad debts?

Thanks a lot for any advice.

Replies

Please login or register to join the discussion.

07th Feb 2013 09:37

I wouldn't want to just write off 2K

You need justification, and there is a possibility that a debt has been overlooked that could still be collected.

Surely you were given a breakdown of the debtors? Check back and find the error, or at least find the invoices/debtors.

Thanks (0)
avatar
08th Feb 2013 04:26

The company has hardly any documentation so this is not possible. I just need to clear this balance somehow.

Thanks (0)
08th Feb 2013 07:12

Contradiction

We have found out that our opening trade debtor balance was overstated by 2k

So how can you be sure of the above statement?

Thanks (0)

Write it off

As long as you have investigated the problem as far as is practical under the circumstances and if the error cannot be found you will have no choice but to write the balance off. I would not use the bad debt account becuase you dont know that this is correct.

I would allocate an account which is not tax allowable and write it off there so that it is clearly visible.

Then just move on.

Thanks (1)
avatar
11th Feb 2013 04:27

ok, thanks for your advice :-)

Thanks (0)