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Missing / Stolen Money - Accounting Treatment

Hi All

Wonder if anyone can help?

Just received the accounts from the accountantat my local club's AGM  (and although advertised as MAAT MIP, isn't actual on the AAT MIP Directory!). There was some money missing during the year, but the missing money has been included in the purchases / cost of goods sold figure on the P+L. Is this the correct treatment?

I also think as the missing money was taken directly from the till from the takings, the VAT man will still want his cut. However, I am told this is not the case..

Any advice is much appreciated.

Kind Regards

John

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By alattax
06th Sep 2012 12:12

If the loss of the money has been included in purchases/cost of sales it implies the treatment so far has been

Dr Cash Cr Sales

then

Dr CoS  Cr Cash

If this is the case the sales already include the stolen money and the vat treatment should be correct. But you really need to get the detail from the accountant. 

The shortcut often taken is to exclude stolen cash from sales. The vat office will say the supply has already been made before the theft and therefore vat due.

If there needs to be any reliance on the gross profit %age reducing sales or charging to cost of sales is incorrect. 

 

 

 

 

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