Last year corrections

Last year corrections

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When I find errors in previous years data(say insurance payment was recorded twice on sage and never corrected)  and make adjustments to previous years and date them 1st of the following year - do I post the adjustment to the insurance nominal or suspense or P&L?

Please help!!!

Replies (4)

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By Witch-Queen
08th Aug 2014 22:01

Last year corrections

If you are posting these adjustments dated 1st of the new year then you post them to the insurance nominal.

If you are posting them dated the 31st of last year after year end has been run in Sage but before the final accounts have been produced so that the adjustment is included in that, then they go to the Profit & Loss

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By johngroganjga
09th Aug 2014 07:59

Don't quite understand the above. The entry you require is the same whether you are making the correction in the year in which the error occurred or a later year (unless you are doing it as a PYA).

You Cr Insurance (because that is the figure that is or was overstated) and you Dr wherever the other side of the duplication is (which you don't explain).

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By I'msorryIhaven'taclue
09th Aug 2014 09:15

I Think I get it...

John, it's because in her second para Witch Queen is contemplating a scenario in which the Sage year end routine has been carried out; the insurance account, along with all the other P&L accounts, will have had its balance cleared and posted to a "P & L account" by Sage as part of its year end routine.

I guess she's trying to keep the "new" year's insurance account clear of mistakes.

 

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By Witch-Queen
09th Aug 2014 13:39

Close but not exactly

Let me clarify, the OP stated that this is an insurance payment that had been posted twice in Sage. I therefore read this as a 'How to correct Sage' question

Scenario 1: The year end has been run in Sage (correctly explained by i'msorry)  and last years accounts have been completed and filed with HMRC, so too late to change last year.

Here you would post to the Insurance nominal as the 1st of the new year and last years error would now be corrected in this years accounts

Scenario 2: The year end has been run in Sage but the final accounts have not yet been completed and filed.

Here you would post to the P & L account as 31st of last year, (because the insurance nominal for that year has already been rolled up into the P & L nominal when they year end was run) and tell whoever is doing the final accounts to make an adjustment to last years accounts

FYI, if you post anything dated last year into any P & L nominal after the year end has been run in Sage, the value will show as Prior Year Adjustment in the Capital Account of the Balance sheet of this years accounts and then need to be journaled to the P & L nominal.. Therefore, if Scenario 2 applies, it's just easier to post direct to the P & L

I hope that clarifies how it works in Sage

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